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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________________
FORM T-3
FOR APPLICATIONS FOR QUALIFICATIONS OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
BISSELL INC.
2345 WALKER, N.W.
GRAND RAPIDS, MICHIGAN 49544
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
Title of Class Amount
-------------- ------
Subordinated Notes due June 30, 2008 Approximately $18,000,000
Approximate date of proposed public offering: Not Applicable
Name and address of agent for service:
Mark J. Bissell
President and Chief Executive Officer
BISSELL Inc.
2345 Walker, N.W.
Grand Rapids, Michigan 49544
With copies to:
David M. Hecht, Esq.
Hecht & Lentz
333 Bridge Street, N.W.
Suite 330
Grand Rapids, Michigan 49504
The obligor hereby amends this application for qualification on such
date or dates as may be necessary to delay its effective date until:
(i) the 20th day after the filing of a further amendment which specifically
states that it shall supersede this amendment, or (ii) such date as the
Commission, acting pursuant to said Section 307(c) of the Act, may determine
upon the written request of the obligor.
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1. General Information.
BISSELL Inc. ("BISSELL" or the Company") is a corporation incorporated
under the laws of the State of Michigan.
2. Securities Act Exemption Applicable.
In connection with the Company's offer to redeem shares of its issued and
outstanding common stock, the Company will, in addition to making cash
payments, exchange its Subordinated Notes (the "Notes") solely for its common
stock held by its stockholders which accept the Company's offer. The Company
will not pay any commission or other remuneration, directly or indirectly, to
any person or entity for soliciting any stockholder. Based on the foregoing,
the Notes are exempt under Section 3(a)(9) of the Securities Act of 1933, as
amended.
Neither the Company, nor any underwriter will sell the Notes or other
securities of the same class of the Company at or about the same time as the
transaction for which the exemption is claimed. The Company has incurred
certain legal and accounting and printing fees in connection with the
transaction. No holder of common stock will make any cash payment in
connection with the exchange of the Company's notes in partial redemption of
its common stock.
3. Affiliates.
The following table sets forth, as of January 1, 1998, those persons who
may be deemed "affiliates" of the Company and the respective voting securities
owned by each or such other bases of control:
Voting Securities
Name or other Bases of Control
- ---- -------------------------
See list of Directors and Management control
Executive Officers in Item 4,
below
Michigan National Bank, Trustee As Trustee, MNB controls
under Will of M.R. Bissell and 249,205 shares of common stock
under various other agreements of the Company
Barcolene Incorporated Each listed entity is wholly or
BeAble! Health Centers, Inc. majority owned, directly or
Penn Champ, Inc. indirectly, by the Company
Bissell Graphis Corporation
Imperial Graphics, Inc.
Atlas Tag & Label, Inc.
ATL-East Tag & Label, Inc.
Sierra Tag & Label, Inc.
Bissell Healthcare Corporation
Am Fab, Inc.
Midland Manufacturing Company, Inc.
J.A. Preston Corporation
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Tumble Forms, Inc.
Sammons Preston Canada Inc.
Bissell International Corporation
Bissell A.G.
Bissell Austrailia Pty. Ltd.
Bissell Ltd.
Bissell Mexico, S.A. de C.V.
Bissell S.A.
Bissell Mexico, Inc.
Bissell Mexico, S. de R.I. de C.V.
Bissell FSC Inc.
4. Directors and Executive Officers.
Directors and Executive Officers. The following table sets forth certain
information concerning the directors and executive officers of the Company:
Name Positions with the Company
---- --------------------------
John M. Bissell Director and Chairman of the Board
Mark J. Bissell Director, President and Chief Executive
Officer
Matthew R. Bissell Director and Senior Vice President
Howard A. Schwartz Senior Vice President
Daniel T. Caldon Senior Vice President-Administration
Chief Financial Officer, Treasurer and
Assistant Secretary
Timothy E. Bosscher Vice President - Controller
Stephen R. Kretschman Secretary
Harry J. Bloem Director
Christy A. Cameron Director
Sabra M. Clark Director
Craig J. Duchossois Director
H. Kirke Latrop, III Director
Peter M. Sears Director
Jack P. Smith Director
The mailing address of all directors and executive officers is 2345 Walker,
N.W., Grand Rapids, Michigan 49544.
5. Principal Owners of Voting Securities.
The Company only has common stock issued and outstanding. The following
table sets forth certain information, as of January 15, 1997, regarding each
person known by the Company to own of record, whether beneficially or
otherwise, ten percent or more of each class of the Company's
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outstanding voting securities and the number of such securities and the total
voting power with respect thereof.
Name and Mailing Address Number of Shares Percent
- ------------------------------- ---------------- -------
Michigan National Bank, Trustee 249,205 15.0%
77 Monroe Center
PO Box 1707
Grand Rapids, MI 49501-1707
BISSELL Inc. Employee Stock Ownership Plan 477,404 28.7%
2345 Walker, N.W.
Grand Rapids, Michigan 49544
The Company believes that upon completion of the redemption offer and
consequent exchange of Notes in redemption of common stock each of the persons
listed above in this Item 5 and John M. Bissell may own of record, whether
beneficially or otherwise, ten percent or more of the Company's outstanding
common stock. However, the number of shares so owned and the total voting power
with respect thereof cannot be determined until the completion of the
redemption offer.
6. Underwriters.
No person within the three-year period prior to the date hereof has acted
as an "underwriter" (as such term is defined under the Trust Indenture Act of
1939, as amended) of any of the Company's currently issued and outstanding
securities. No person will act as underwriter of the Notes.
7. Capitalization.
a. The following table sets forth certain information regarding each
authorized class of securities of the Company as of January 15, 1997.
Title of Class Amount Authorized Amount Outstanding
- -------------- ----------------- ------------------
Common Stock 3,000,000 1,609,103
Preferred Stock 40,000 0
9.86% Senior Notes $10,000,000 $1,429,000
b. Each share of Common Stock is entitled to one vote. Preferred Stock is
entitled to the number of votes determined by resolution of the Board of
Directors upon issuance. To date, the Board of Directors has not issued any
Preferred Stock. The 9.86% Senior Notes have no conversion or voting rights.
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8. Analysis of Indenture Provisions
The terms of the indenture securities include those stated in the
indenture, to be entered into between the Company and First of America Bank,
N.A., as Trustee, with respect to the Subordinated Notes (the
"Indenture") and made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended (the "TIA"). The following analysis of certain
provisions of the Indenture makes use of certain capitalized terms defined in
the Indenture and not herein and such terms shall have the meanings given to
them in the Indenture and shall be incorporated by reference herein. The
following analysis does not purport to be a complete description of the
Indenture provisions discussed and is qualified in its entirety by reference to
the Indenture, which provisions are incorporated by reference as a part of such
analysis. (Section references are to the relevant provisions of the Indenture).
The Subordinated Notes (the "Notes") may be presented for registration of
transfer or exchange at the offices of the Registrar. Payments of principal and
interest on the Notes will be made by check mailed to the registered address of
the Person entitled thereto as it appears in the register of the Registrar as
of the applicable record date for determining the persons entitled to receive,
as applicable, quarterly payments of interest and annual payments of principal
under the Notes.
The Notes will be issued only in registered form, without coupons, in
denominations which are an even multiple as determined by the Company prior to
the making of the redemption offer. (Section 2.01.) No service charge will be
made for any registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 2.06.)
Prepayment
The Notes may be prepaid at the Company's option, in whole or in part,
upon not less than 30 nor more than 60 days' notice mailed to each Holder of
Notes at his or her address appearing in the register of the Registrar. Any
prepayment of Notes will be done on a pro rata basis. The notice will state the
Interest Payment Date on which the prepayment shall be made; the amount of the
prepayment; if the Notes are being prepaid in part, the portion of the
principal amount of the Notes being prepaid and to be outstanding thereafter
and that, after the Interest Payment Date on which the prepayment is being made
and upon surrender of the Notes, the Notes shall be returned to the Holders
after the Company has placed thereon a notation of the amount prepaid and the
date of such prepayment; the name and address of the Paying Agent; that the
Notes must be surrendered to the Paying Agent to collect the amount being
prepaid; and that, unless the Company defaults in making such prepayment,
interest on the amount being prepaid ceases to accrue on and after the Interest
Payment Date on which the prepayment is being made. If the Company elects to
prepay the Notes in whole or in part, it must furnish to the Trustee, at least
45 days but not more than 60 days before the Interest Payment Date on which
such prepayment will be made, an Officer's Certificate setting forth (i) the
Interest Payment Date on which such prepayment is to be made and (ii) the
amount of principal to be prepaid. (Article 3.)
Subordination
The payment of the principal of and interest on the Notes will, to the
extent set forth in the Indenture, be subordinated in right of payment to the
prior payment in full of all Senior Debt. "Senior Debt" means all of the
Company's indebtedness for borrowed money from time to time outstanding (other
than indebtedness under the Notes) unless the instrument under which such
indebtedness is incurred expressly
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provides that it is on a parity with or subordinated in right of payment to the
Notes. Senior Debt does not include tax liabilities owed or owing by the
Company or trade payables of the Company. Upon any liquidation, dissolution,
reorganization, assignment for the benefit of creditors, marshalling of assets
or any bankruptcy, insolvency or similar proceedings of the Company, (i) the
holders of all Obligations due in respect of Senior Debt will first be entitled
to receive payment in full of all amounts due or to become due thereon before
the Holders of the Notes will be entitled to receive any payment in respect of
the principal of or interest on the Notes and (ii) until all Obligations with
respect to Senior Debt are paid in full in cash, any distribution to which
Holders of Notes would be entitled but for clause (i), above, shall be made to
holders of Senior Debt, as their interests may appear. Until all principal and
other Obligations with respect to the Senior Debt have been paid in full in
cash, the Company shall not make any payments of principal, interest or other
Obligation in respect of the Notes and may not acquire from the Trustee or any
Holder any Notes for cash or property if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt, or an event of
default with respect to any Senior Debt permitting the holders thereof to
accelerate the maturity thereof or, if any judicial proceeding shall be pending
with respect to any such default. The Indenture does not prohibit or limit the
incurrence of Senior Debt by the Company.
Events of Default
The following will be Events of Default under the Indenture: (a) failure
to pay principal on any Notes when due, continuing for five days, whether or
not such payment is prohibited by the subordination provisions of the
Indenture; (b) failure to pay any interest on any Notes when due, continuing
for 30 days, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (c) failure by the Company for 30 days after
notice from the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes to comply with the successor provisions of
the Indenture; (d) failure by the Company for 60 days after proper notice from
the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes to comply with any of its other agreements in the
Indenture or the Notes; (e) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company (or the payment of which is
guaranteed by the Company) whether such Indebtedness or guarantee now exists,
or is created after the date hereof, which default results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness the maturity of which has been so accelerated,
aggregates $5.0 million or more; (f) failure by the Company to pay final
judgments aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; and (g) certain events in
bankruptcy, insolvency or reorganization of the Company. (Section 6.01.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default has occurred and is continuing, the Trustee
is under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 7.02.)
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the outstanding Notes will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. (Section 6.05.)
If an Event of Default has occurred and is continuing, either the Trustee
or the Holders of at least 25% in aggregate principal amount of the outstanding
Notes may accelerate the maturity of all Notes; provided, however, that after
such acceleration, but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of outstanding Notes may,
under certain circumstances, rescind and annul such acceleration if all Events
of Default, other than the non-payment of accelerated principal, have been
cured or waived as provided in the Indenture. (Section 6.02 and 6.04.)
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No Holder of any Notes will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default and unless also the Holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. (Section 6.06.) However, such limitations do not apply to a suit
instituted by a Holder of a Note for the enforcement of payment of the
principal of, or interest on, such Note on or after the respective due dates
expressed in such Notes. (Section 6.07.)
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance. (Section 4.03.)
Modification and Waiver
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes; provided, however, that no
such modification or amendment may, without the consent of the Holder of each
outstanding Notes affected thereby, (a) reduce the principal amount of, or
interest on, any Notes, (b) reduce the principal of or change the fixed
maturity of any installment of principal on any Notes, (c) reduce the interest
rate of or change the time for payment on any Note, (d) waive a Default or
Event of Default in the payment of principal of or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the Notes and a waiver of the payment
default that resulted from such acceleration), (e) make any Note payable in
money other than that stated in the Notes, (f) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of principal of or interest on the
Notes, (g) waive any prepayment with respect to which notice has been given to
the Holders under Section 3.03 of the Indenture, or (h) make any change in
Section 6.04 or 6.07 of the Indenture or in the amendment and waiver provisions
of Section 8.02 of the Indenture.
The Holders of a majority in aggregate principal amount of the outstanding
Notes may waive compliance by the Company with certain restrictive provisions
of the Indenture. (Section 8.02.) The Holders of a majority in aggregate
principal amount of the outstanding Notes may waive any past default under the
Indenture, except a default in the payment of principal or interest or the
performance of any covenant which may be waived only with the consent of all
Holders of the Notes. (Section 6.04)
Consolidation, Merger and Sale of Assets
The Company may, without the consent of any Holders of Notes, consolidate
or merge with or into, or transfer or lease all or substantially all of its
assets to, any Person, and any other Person may consolidate or merge with or
into, or transfer or lease all or substantially all of its assets to, the
Company, provided that (a) the Company is the surviving entity or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or which acquires or leases all or substantially all of the
assets of the Company is organized and existing under the laws of any United
States jurisdiction and assumes the Company's obligations on the Notes and
under the Indenture, (b) after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an
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Event of Default, shall have happened and be continuing, and (c) certain
other conditions are met. (Article 5.)
Restrictions on Transfer
The Notes are not transferable except pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or in a
transaction exempt from the registration requirements of the Securities Act,
and in accordance with all applicable securities laws of the states of the
United States and any foreign jurisdiction. See "The Subordinated Notes;
General" for requirements to complete a transfer, including registration of
transferred Notes with the Company and payment of applicable expenses.
Satisfaction and Discharge of the Indenture.
The Indenture will be discharged and will cease to be of further effect as
to all outstanding Notes when:
(1) all Notes theretofore authenticated and delivered (except lost, stolen
or destroyed Notes which have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Company) have been delivered to the Trustee for cancellation; or
(2) (i) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable by reason of the making of a notice of
prepayment or otherwise and the Company has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation of principal and accrued
interest to the date of maturity or prepayment and (ii) the Company has paid
all sums required to be paid by it under this Indenture.
The Company will deliver an Officers' Certificate to the Trustee stating
that all conditions precedent to satisfaction and discharge have been complied
with. (Section 10.2).
Evidence of Compliance.
Upon any request or application by the Company to the Trustee to take any
action under the Indenture, the Company may be required to furnish to the
Trustee: (a) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in the Indenture
relating to the proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in the Indenture is required to include: (1) a statement
that the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of each such person, such condition or covenant has been complied
with; provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials. (Section 11.5)
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9. Other Obligors.
The Company is the only obligor under the Indenture governing the
Subordinated Notes.
Contents of Application for Qualification.
This Application for qualification comprises:
A. Pages number 1 to 10, consecutively.
B. The statement of eligibility and qualification of the trustee under the
indenture to be qualified; and
C. The following exhibits in addition to those filed as a part of the
statement of eligibility and qualification of the trustee.
Exhibit T3A Articles of Incorporation of the Company, dated April
18,1989.
Exhibit T3B By-laws of the Company, dated April 8, 1974.
Exhibit T3C Indenture to be entered into between the Company, as Issuer,
and First of America Corporation, as Trustee, with respect
to the Subordinated Notes due June 30, 2008.
Exhibit T3D Not Applicable.
Exhibit T3E Draft of the Redemption Offer Memorandum of the Company to be
distributed to all Stockholders.
Exhibit T3F Cross reference sheet showing the location in the indenture
of the provisions inserted therein pursuant to Section 310
through 318(a), inclusive of the Trust Indenture Act of 1939.
REMAINING PORTION OF PAGE INTENTIONALLY LEFT BLANK
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SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, BISSELL
Inc., a corporation qualified and existing under the laws of Michigan (the
"applicant'), has duly caused this application to be signed on its behalf by
the undersigned, thereunto duly authorized, and its seal to be hereunto fixed
and attested, all in the City of Grand Rapids, and State of Michigan, on the
20th day of January, 1998.
BISSELL INC.
By: /s/ Mark J. Bissell
-------------------------------------
Mark J. Bissell
President and Chief Executive Officer
Attest: /s/ Daniel T. Caldon
------------------------------------
Name: Daniel T. Caldon
Title: Senior Vice President-Administration
END OF DOCUMENT
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Exhibit Index
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Exhibit No. Description
- ----------- -----------
Exhibit 3(i) Articles of Incorporation of the Company, dated April 18, 1989.
Exhibit 3(ii) By-laws of the Company, dated April 8, 1974.
Exhibit 4 Indenture to be entered into between the Company, as Issuer,
and First of America Corporation, as Trustee, with respect to
the Subordinated Notes due June 30, 2008.
Exhibit 25 Form T-1, statement of eligibility.
Exhibit 99.1 Draft of the Redemption Offer Memorandum of the Company to be
distributed to all Stockholders.
Exhibit 99.2 Cross reference sheet showing the location in the indenture of
the provisions inserted therein pursuant to Section 310
through 318(a), inclusive of the Trust Indenture Act of 1939.
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EXHIBIT T3A
RESTATED ARTICLES OF INCORPORATION OF
BISSELL INC.
1. These Restated Articles of Incorporation are executed pursuant
to the provisions of Sections 641-651, Act 284, Public Acts of 1972.
2. The present name of the corporation is BISSELL INC.
3. All of the former names of the corporation are as follows:
THE BISSELL CORPORATION
BISSELL CARPET SWEEPER COMPANY
4. The date of filing the original Articles of Incorporation was
December 28, 1923.
5. The following Restated Articles of Incorporation supersede the
original Articles of Incorporation as amended and shall be the Articles
of Incorporation of the corporation:
ARTICLE I
The name of the corporation is:
BISSELL INC.
ARTICLE II
The purpose of the corporation is to engage in any one or more lawful
acts or activities within the purposes for which corporations may be organized
under the Business Corporation Act.
ARTICLE III
The total authorized capital stock of the corporation is one hundred
twenty thousand (120,000) shares of common stock of the par value of Ten
Dollars ($10) per share, and forty thousand (40,000} shares of preferred stock,
of the par value of Ten Dollars ($10) per share.
The following provisions are applicable to the authorized stock of the
corporation:
(A) PROVISIONS APPLICABLE TO COMMON STOCK:
(1) All shares of common stock shall be of one class. Each holder
of common stock shall be entitled to one vote for each share held by him.
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(2) Subject to the preferential dividend rights, if any,
applicable to shares of preferred stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for
purchase, retirement or sinking funds for preferred stock, the holders
of common stock shall be entitled to receive, to the extent permitted
by law, such dividends as may be declared from time to time by the
board of directors.
(3) In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding up of the
corporation, after distribution in full of the preferential amounts,
if any, to be distributed to the holders of shares of preferred stock,
holders of common stock shall be entitled to receive all of the
remaining assets of the corporation of whatever kind available for
distribution to stockholders ratably in proportion to the number of
shares of common stock held by them. The board of directors may
distribute in kind to the holders of common stock such remaining
assets of the corporation or may sell, transfer or otherwise dispose
of all or any part of such remaining assets to any person and may sell
all or any part of the consideration so received and distribute any
balance thereof in kind to holders of common stock. The merger or
consolidation of the corporation into or with any other corporation,
or the merger of any other corporation into it, or any purchase or
redemption of shares of stock of the corporation of any class, shall
not be deemed to be a dissolution, liquidation or winding up of the
corporation for the purposes of this paragraph.
(B) PROVISIONS APPLICABLE TO PREFERRED STOCK:
(1) Provisions to be Fixed by the Board of Directors
The board of directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of preferred stock in one
or more series, each with such voting powers, full or limited, or without
voting powers, and with such designations, preferences and relative,
participating, conversion, optional or other rights, and such qualifications,
limitations or restrictions thereof, as shall be stated in the resolution or
resolutions providing for the issue thereof adopted by the board of directors,
and as are not stated in these Articles, or any amendment thereto, including
(but without limiting the generality of the foregoing) the following:
(a) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the board
of directors in creating such series) be increased or decreased (but not below
the number of shares then outstanding) from time to time by action of the board
of directors.
(b) The dividend rate or rates on the shares of such series and
the relation which such dividends shall bear to the dividends payable on any
other class of capital stock or on any other series of preferred stock, the
terms and conditions upon which and the periods in respect of which dividends
shall be payable, whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the date or dates from which dividends shall
accumulate.
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(c) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, and whether redeemable at the option of
the holder or the corporation or upon the happening of a specified event, the
limitations and restrictions with respect to such redemption, the time or times
when, the price or prices or rate or rates at which, the adjustments with which
and the manner in which such shares shall be redeemable, including the manner
of selecting shares of such series for redemption if less than all shares are
to be redeemed.
(d) The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any other
series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution or winding up of the corporation, which rights may
vary depending on whether such liquidation, dissolution, distribution or
winding up is voluntary or involuntary, and, if voluntary, may vary at
different dates.
(e) Whether the shares of such series shall be subject to the
operation of a purchase, retirement or sinking fund and, if so, whether and
upon what conditions such fund shall be cumulative or non-cumulative, the
extent to which and the manner in which such fund shall be applied to the
purchase or redemption of the shares of such series for retirement or to other
corporate purposes and the terms and provisions relative to the operation
thereof.
(f) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or of any other series of any class
of capital stock of the corporation, and, if so convertible or exchangeable,
the price, or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and conditions of
such conversion or exchange.
(g) The voting powers, full and/or limited, if any, of the shares
of such series, and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having similar
provision) shall be entitled to vote separately as a single class, for the
election of one or more additional directors of the corporation in case of
dividend arrearages or other specified events, or upon other matters.
(h) Whether the issuance of any additional shares of such series,
or of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other series.
(i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the board of directors may deem
advisable and as shall not be inconsistent with the provisions of these
Articles.
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(2) Provisions Applicable to All Preferred Stock:
(a) All preferred stock shall rank equally and be identical in all
respects except as to the matters permitted to be fixed by the board of
directors, and all shares of any one series thereof shall be identical in every
particular except as to the date, if any, from which dividends on such shares
shall accumulate.
(b) Shares of preferred stock redeemed, converted, exchanged,
purchased, retired or surrendered to the corporation, or which have been issued
and reacquired in any manner, may, upon compliance with any applicable
provisions of the Michigan Business Corporation Act be given the status of
authorized and unissued shares of preferred stock and may be reissued by the
board of directors as part of the series of which they were originally a part
or may be reclassified into and reissued as part of a new series or as a part
of any other series, all subject to the protective conditions or restrictions
of any outstanding series of preferred stock.
ARTICLE IV
The address (which is the mailing address) of the current registered
office of the corporation is 2345 Walker Avenue, N.W., Grand Rapids, Michigan
49504.
The name of the current resident agent is John M. Bissell.
ARTICLE V
When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them,
a court of equity jurisdiction within the state, on application of this
corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors, or
of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or a reorganization, agree to a compromise or
arrangement or a reorganization of this corporation as a consequence of the
compromise or arrangement, the compromise or arrangement and the
reorganization, if sanctioned by the court to which the application has been
made, shall be binding on all the creditors or class of creditors, or on all
the shareholders or class of shareholders and also on this corporation.
ARTICLE VI
Any action required or permitted by the Michigan Business Corporation
Act, these Articles, or the bylaws of the corporation, to be taken at any
annual or special meeting of shareholders may be taken without a meeting,
without prior notice, and without a vote, if a consent or
<PAGE> 5
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having no less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to shareholders who have not consented in
writing.
ARTICLE VII
The board of directors may, by resolution or resolutions, confer upon
the holders of any one or more bonds, debentures, and notes issued or to be
issued by the corporation as part of the terms of such bonds, debentures, or
note, rights to inspect the corporate books and records and to vote in. the
election of directors and on any other matters on which shareholders of the
corporation may vote, to the extent, in the manner, and subject to the
conditions prescribed in such resolution or resolutions.
ARTICLE VIII
The corporation shall indemnify its present and past directors,
officers, employees, and agents, and such other persons as it shall have the
power to indemnify, to the full extent permitted under, and subject to the
limitations of, the Michigan Business Corporation Act.
ARTICLE IX
The corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, and to add
additional Articles hereto, in the manner now or hereafter prescribed by
statute, and all rights conferred upon shareholders herein are granted subject
to this reservation.
ARTICLE X
The duration of the corporation is perpetual.
ARTICLE XI
No holder of shares of stock of the corporation of any class which are
now or hereafter may be authorized shall be entitled as a matter of right to
subscribe for, purchase or receive any shares of the stock of any class which
are now or hereafter may be authorized or any rights or options of the
corporation which it may issue or sell, whether out of the number of shares
authorized by these Articles of Incorporation, by amendment thereof or out of
the shares of stock of the corporation acquired by it after the issuance
thereof, nor shall any shareholder be entitled as a matter of right to
subscribe for, purchase or receive any bonds, debentures or other securities
which the corporation may issue or sell that shall be convertible into or
exchangeable for stock or which shall have attached to or appertain to any
warrant or warrants or other instrument or instruments that shall confer upon
the holder or owner of such obligation the right to subscribe
<PAGE> 6
for, purchase or receive any shares of the capital stock from the corporation.
However, all or such additional issues of stock, rights and options or of bonds,
debentures or other securities convertible into or exchangeable for stock or to
which warrants shall be attached or appertain or which shall confer upon the
holder the right to subscribe for, purchase or receive any shares of stock may
be issued and disposed of by the Board of Directors to such persons, firms or
corporations upon such terms as they may deem advisable.
With respect to any portion of the stock of the corporation which is
now or hereafter may be authorized or to any obligations convertible into stock
of the corporation, should the Board of Directors offer the same to the
shareholders of any class thereof, such offer shall not in any way constitute a
waiver or release of the right of the Board of Directors to dispose of other
portions of said stock subsequently without so offering the same to the
shareholders. The acceptance of stock in the corporation shall be a waiver of
any such preemptive or preferential right which in the absence of this
provision might otherwise be asserted by the shareholders of the corporation.
These Restated Articles of Incorporation were duly adopted by the
shareholders on the 8 day of April, 1974, in accordance with the provisions of
Section 642, Act 284, Public Acts of 1972. The necessary number of shares as
required by statute were voted in favor of the Restated Articles of
Incorporation.
Dated this 8 day of April, 1974.
BISSELL INC.
By: /s/ John M. Bissell
------------------------------
John M. Bissell, President
<PAGE> 7
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), or Act 162, Public Acts of 1982, as amended (nonprofit
corporations), the undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Bissell Inc.
2. The corporate identification number (CID) assigned by the Bureau is:
174-734.
3. The location of its registered office is:
2345 Walker, N.W., Grand Rapids, Michigan 49504
4. Article III of the Articles of Incorporation is hereby amended to read
as follows:
"ARTICLE III
The total authorized capital stock of the corporation is three million
(3,000,000) shares of common stock of the par value of One Dollar ($1.00) per
share and forty thousand (40,000) shares of preferred stock, of the par value
of Ten Dollars ($10.00) per share.
The following provisions are applicable to the authorized stock of the
corporation:
(A) PROVISIONS APPLICABLE TO COMMON STOCK:
(1) All shares of common stock shall be of one class. Each holder
of common stock shall be entitled to one vote for each share held by him.
(2) Subject to the preferential dividend rights, if any,
applicable to shares of preferred stock and subject to applicable requirements,
if any, with respect to the setting aside of sums for purchase, retirement or
sinking funds for preferred stock, the holders of common stock shall be
entitled to receive, to the extent permitted by law, such dividends as may be
declared from time to time by the board of directors.
(3) In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of preferred stock, holders of common stock shall be
entitled to receive all of the remaining assets of the corporation of whatever
kind available for distribution to shareholders ratably in proportion to the
number of shares of common stock held by them. The board of directors may
distribute in kind to the holders of common stock such remaining assets of the
corporation or may sell, transfer or otherwise dispose of all or any part of
such remaining assets to any person and may sell all or any part of the
consideration so received
<PAGE> 8
and distribute any balance thereof in kind to holders of common stock. The
merger or consolidation of the corporation into or with any other corporation,
or the merger of any other corporation into it, or any purchase or redemption
of shares of stock of the corporation of any class, shall not be deemed to be a
dissolution, liquidation or winding up of the corporation for the purposes of
this paragraph.
(B) PROVISIONS APPLICABLE TO PREFERRED STOCK:
(1) Provisions to be Fixed by the Board of Directors:
The board of directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of preferred stock in one
or more series, each with such voting powers, full or limited, or without
voting powers, and with such designations, preferences and relative,
participating, conversion, optional or other rights, and such qualifications,
limitations or restrictions thereof, as shall be stated in the resolution or
resolutions providing for the issue thereof adopted by the board of directors,
and as are not stated in these Articles, or any amendment thereto, including
(but without limiting the generality of the foregoing) the following:
(a) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the board of
directors in creating such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by action of the board of
directors.
(b) The dividend rate or rates on the shares of such series and
the relation which such dividends shall bear to the dividends payable on any
other class of capital stock or on any other series of preferred stock, the
terms and conditions upon which and the periods in respect of which dividends
shall be payable, whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the date or dates from which dividends shall
accumulate.
(c) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, and whether redeemable at the option of
the holder or the corporation or upon the happening of a specified event, the
limitations and restrictions with respect to such redemption, the time or times
when, the price or prices or rate or rates at which, the adjustments with which
and the manner in which such shares shall be redeemable, including the manner
of selecting shares of such series for redemption if less than all shares are
to be redeemed.
(d) The rights to which the holders of shares of such series shall
be entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution or winding up of the corporation, which rights may
vary depending on whether such liquidation,
<PAGE> 9
dissolution, distribution or winding up is voluntary or
involuntary, and, if voluntary, may vary at different dates.
(e) Whether the shares of such series shall be subject to
the operation of a purchase, retirement or sinking fund and, if so,
whether and upon what conditions such fund shall be cumulative or
noncumulative, the extent to which and the manner in which such fund
shall be applied to the purchase or redemption of the shares of such
series for retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof.
(f) Whether the shares of such series shall be convertible
into or exchangeable for shares of any other class or of any other
series of any class of capital stock of the corporation, and, if so
convertible or exchangeable, the price or prices or the rate or rates
of conversion or exchange and the method, if any, of adjusting the
same, and any other terms and conditions of such conversion or
exchange.
(g) The voting powers, full and/or limited, if any, of the
shares of such series, and whether and under what conditions the.
shares of such series (alone or together with the shares of one or
more other series having similar provisions) shall be entitled to vote
separately as a single class, for the election of one or more
additional directors of the corporation in case of dividend arrearages
or other specified events, or upon other matters.
(h) Whether the issuance of any additional shares of such
series, or of any shares of any other series, shall be subject to
restrictions as to issuance, or as to the powers, preferences or
rights of any such other series.
(i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the board of directors may deem
advisable and shall not be inconsistent with the provisions of these Articles.
(2) Provisions Applicable to All Preferred Stock:
(a) All preferred stock shall rank equally and be identical
in all respects except as to the matters permitted to be fixed by the
board of directors, and all shares of any one series thereof shall be
identical in every particular except as to the date, if any, from
which dividends on such shares shall accumulate.
(b) Shares of preferred stock redeemed, converted,
exchanged, purchased, retired or surrendered to the corporation, or
which have been issued and reacquired in any manner, may, upon
compliance with any applicable provisions of the Michigan Business
Corporation Act be given the status of authorized and unissued shares
of preferred stock and may be reissued by the board of directors as
part of the series of which they were originally a part or may be
reclassified into and reissued as part of a new series or as a
<PAGE> 10
part of any other series, all subject to the protective conditions or
restrictions of any outstanding series of preferred stock."
The foregoing amendment to the Articles of Incorporation was duly
adopted on the 19th day April, 1988. The amendment was duly adopted in
accordance with Section 611(2) of the Act by the vote of the shareholders if a
profit corporation, or by the vote of the shareholders or members if a
nonprofit corporation, or by the vote of the directors if a nonprofit
corporation organized on a nonstock directorship basis. The necessary votes
were cast in favor of the amendment.
Signed this 19th day of April, 1988.
BISSELL Inc.
By: /s/ John M. Bissell
------------------------------
John M. Bissell, President
<PAGE> 11
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), or Act 162, Public Acts of 1982, as amended (nonprofit
corporations), the undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Bissell Inc.
2. The corporate identification number (CID) assigned by the Bureau is:
174-734.
3. The location of its registered office is:
2345 Walker, N.W., Grand Rapids, Michigan 49504
4. Articles VIII and XII of the Articles of Incorporation are hereby
amended to read as follows:
"ARTICLE VIII
Directors and executive officers of the Corporation shall be
indemnified to the fullest extent permitted by law in connection with any
actual or threatened civil, criminal, administrative or investigative action,
suit or proceeding arising out of their service to the corporation as directors
or executive officers or in any other capacity. Persons who are not directors
or executive officers may be similarly indemnified to the extent authorized at
any time by the Board of Directors of the corporation.
ARTICLE XII
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for a breach of fiduciary
duty as a director, except liability for:
(a) any breach of the director's duty of loyalty to the
corporation or its shareholders;
(b) acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of the law;
(c) a violation of Section 551(1) of the Michigan Business
Corporation Act; and
(d) any transaction from which the director derived an improper
personal benefit.
If, after adoption of this Article by the shareholders of the
corporation, the Michigan Business Corporation Act is amended to further
eliminate or limit the liability of a director, then a director of the
corporation shall not be liable to the corporation or its shareholders to the
fullest extent permitted by the Michigan Business Corporation Act, as so
amended. No amendment to
<PAGE> 12
or alteration, modification or repeal of this Article shall increase the
liability or alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment, alteration, modification or repeal."
The foregoing amendment to the Articles of Incorporation was duly
adopted on the 18th day of April, 1989. The amendment was duly adopted in
accordance with Section 611(2) of the Act by the vote of the shareholders if a
profit corporation, or by the vote of the shareholders or members if a
nonprofit corporation, or by the vote of the directors if a nonprofit
corporation organized on a nonstock directorship basis. The necessary votes
were cast in favor of the amendment.
Signed this 18th day of April, 1989.
By: /s/ John M. Bissell
-------------------------------
John M. Bissell, President
<PAGE> 1
EXHIBIT T3B
BYLAWS
OF
BISSELL INC.
[As Amended April 8, 1974]
ARTICLE I
OFFICES
Section 1. Offices. The corporation may have offices at such places
both within and without the State of Michigan as the board of directors may
from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Times and Places of Meeting. Meetings of the
shareholders shall be held at such time and place as may be fixed from time to
time by the board of directors, within or without the State of Michigan.
Section 2. Annual Meeting. An annual meeting of the
shareholders for election of directors and for such other business as may come
before the meeting shall, unless such action is taken by written consent as
provided in the Articles of Incorporation, be held each year at such time on
such business day in the month of April as may be designated by the board, or
if no such designation is made, at 2:00 p.m. on the second Monday in such
month, or if that be a legal holiday, then on the next succeeding business day.
Section 3. Special Meetings. Special meetings of the
shareholders may be called by the board of directors or by the President, and
shall be held on such date as may be specified in the notice of the meeting.
Section 4. Notice of Meetings. Written notice of all meetings
of shareholders, stating the time, place, and purposes thereof, shall be given
to each shareholder of record entitled to vote thereat, at least ten (10) but
not more than sixty (60) days before the date fixed for the meeting, either
personally or by mail (notice by mail shall be deemed given when mailed).
Notice of any meeting need not be given to any shareholder who signs a waiver
of notice before or after the meeting. The attendance of a shareholder at a
meeting without protesting at the beginning of the meeting the lack of notice
of such meeting shall constitute a waiver of notice by him.
<PAGE> 2
Section 5. Shareholder List. The officer or agent who has
charge of the stock transfer books of the corporation shall make and certify a
complete list of the shareholders entitled to vote at each meeting of
shareholders, arranged by class or series of shares in alphabetical order,
showing the address of and the number of shares registered in the name of each
shareholder. The list shall be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any shareholder
who is present. If the requirements of this Section are not complied with, then
upon demand of any shareholder or proxy who in good faith challenges the
existence of sufficient votes to carry any action at a meeting, the meeting
shall be adjourned until the requirements are complied with. Failure to comply
with the requirements of this Section does not affect the validity of any
action taken at a meeting before the making of such demand.
Section 6. Quorum. The holders of a majority of the shares
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business, except as otherwise provided by statute or by the Articles of
Incorporation; provided, that when any specified action is required to be
voted upon by a class or series of shares voting as a class or series, the
holders of a majority of the shares of such class or series shall constitute a
quorum for the transaction of such specified action. If there shall be no
quorum, the shares present by majority vote may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present, when any business may be transacted which might have been
transacted at the meeting as first convened had there been a quorum. However,
if after the adjournment the board fixes a new record date for the adjourned
meeting, notice of the time, place, and purposes of such meeting shall be given
to each shareholder of record on the new record date. Once a quorum shall have
been determined to be present, the shareholders present in person or by proxy
at any meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
Section 7. Vote Required. When an action, other than the
election of directors, to be taken by vote of the shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled
to vote thereon, unless a greater plurality is required by the Articles of
Incorporation or express provision of statute. Except as otherwise provided by
the Articles of Incorporation, directors shall be elected by a plurality of the
votes cast at an election.
Section 8. Voting Rights. Except as otherwise provided by the
Articles of Incorporation or the resolution or resolutions of the board of
directors creating any class of stock, each shareholder shall at every meeting
of shareholders be entitled to one vote in person or by proxy for each share of
the capital stock having voting power held by such shareholder, but no proxy
shall be voted on after three (3) years from its date, unless the proxy
provides for a longer period.
Section 9. Conduct of Meetings. Meetings of shareholders
generally shall follow accepted rules of parliamentary procedure, subject to
the following:
<PAGE> 3
(a) The chairman of the meeting shall have absolute authority over
matters of procedure, and there shall be no appeal from the ruling of the
chairman. If, in his absolute discretion, the chairman deems it advisable to
dispense with the rules of parliamentary procedure as to any one meeting of
shareholders or part thereof, he shall so state and shall clearly state the
rules under which the meeting or appropriate part thereof shall be conducted.
(b) If disorder should arise which prevents the continuation of
the legitimate business of the meeting, the chairman may quit the chair and
announce the adjournment of the meeting; and upon his so doing, the meeting is
immediately adjourned.
(c) The chairman may ask or require that anyone not a bona fide
shareholder or proxy leave the meeting.
(d) A resolution or motion shall be considered for vote only if
proposed by a shareholder or a duly authorized proxy and seconded by a
shareholder or duly authorized proxy other than the individual who proposed the
resolution or motion.
(e) Except as the chairman may permit, no matter shall be
presented to the meeting which has not been submitted for inclusion in the
agenda within ten (10) days after the date of mailing of notice of the meeting.
Section 10. Action Without a Meeting. Any action required or
permitted to be taken at an annual or special meeting of shareholders may be
taken without a meeting, without prior notice and without vote, if:
(a) All the shareholders entitled to vote thereon consent thereto
in writing; or
(b) Provided the same is authorized by the Articles of
Incorporation, a consent or consents in writing be signed by the holders of
outstanding stock having not less than the minimum number of votes which
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted (prompt notice of the
taking of such action shall be given to shareholders who have not consented in
writing).
ARTICLE III
RECORD DATE
Section 1. Fixing of Record Date by Board. For the purpose of
determining shareholders entitled to notice of and to vote at a meeting of
shareholders or an adjournment thereof, or to express consent or to dissent
from a proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of a dividend or allotment of a right,
or for the purpose of any other action, the board of directors may fix, in
advance, a date as the record date for any such determination of shareholders.
The date shall not be more than 60 nor less than 10 days before the date of the
meeting, nor more than 60 days before any other action.
<PAGE> 4
Section 2. Provision for Record Date in the Absence of Board
Action. If a record date is not fixed by the board of directors: (a) the
record date for determination of shareholders entitled to notice of or to vote
at a meeting of shareholders shall be the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
next preceding the day on which the meeting is held; and (b) the record date
for determining shareholders for any purpose other than that specified in
subsection (a) shall be the close of business on the day on which the
resolution of the board relating thereto is adopted.
Section 3. Adjournments. When a determination of shareholders
of record entitled to notice of or to vote at a meeting of shareholders has
been made as provided in this Article, the determination applies to any
adjournment of the meeting, unless the board fixes a new record date for the
adjourned meeting.
ARTICLE IV
DIRECTORS
Section 1. Number of Directors. A director need not be a
shareholder, a citizen of the United States, or a resident of the State of
Michigan. The number of directors which shall constitute the whole board shall
be determined from time to time by resolution of the board of directors. The
directors shall be elected at the annual meeting of the shareholders, except as
provided in Section 2 of this Article, and each such director elected shall
hold office until his successor is elected.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors after the vacancy has occurred, though less than
a quorum, and the directors so chosen shall hold office for the unexpired term
in respect of which such vacancy occurred.
Section 3. Powers. The business of the corporation shall be
managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the shareholders.
Section 4. Fees and Expenses. The directors may be paid their
expenses, if any, of attendance at each meeting of the board of directors and
may be paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
Section 5. Resignation. Any director may resign at any time and
such resignation shall take effect upon receipt thereof by the corporation, or
such subsequent time as set forth in
<PAGE> 5
the notice of resignation. Any or all of the directors may be removed, with or
without cause, by the vote of the holders of a majority of the shares entitled
to vote at an election of directors, except as otherwise provided by statute or
the Articles of Incorporation.
ARTICLE V.
MEETINGS OF DIRECTORS
Section 1. Places of Meetings. The board of directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Michigan.
Section 2. First Meeting of Newly Elected Board. The first
meeting of each newly elected board of directors shall be held following the
annual meeting of shareholders, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event such meeting is not
held immediately following the annual meeting of shareholders, the meeting may
be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors, or as
shall be specified in a written waiver signed by all of the directors.
Section 3. Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and at such place as shall
from time to time be determined by the board.
Section 4. Special Meetings. Special meetings of the board may
be called by the President or Secretary or by any director, on two (2) days'
notice to each director, either personally or by mail or by telegram.
Section 5. Purpose Need Not Be Stated. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice of such meeting.
Section 6. Quorum. At all meetings of the board a majority of
the total number of directors shall constitute a quorum for the transaction of
business, and the acts of a majority of the directors present at any meeting at
which there is a quorum shall be the acts of the board of directors, except as
may be otherwise specifically provided by statute or by the Articles of
Incorporation. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 7. Action Without a Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the board of directors or
of any committee thereof may be taken without a meeting, if, before or after
the action, a written consent thereto is signed by all members of the board or
of such committee as the case may be, and such written consent is filed with
the minutes or proceedings
<PAGE> 6
of the board or committee. Such consent shall have the same effect as a vote of
the board or committee for all purposes.
Section 8. Meeting by Telephone or Similar Equipment. The board
of directors or any committee designated by the board of directors may
participate in a meeting of such board, or committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section shall constitute' presence in person at such
meeting.
Section 9. Waiver of Notice. Attendance of a director at a
meeting of the board or any committee constitutes a waiver of notice of the
meeting, except where a director attends a meeting for the express purpose of
objecting to the transacting of any business because the meeting is not
lawfully called or convened. Notice of any meeting of the board or a committee
need not be given to any person entitled thereto who waives such notice in
writing, either before or after the meeting.
ARTICLE VI
COMMITTEES OF DIRECTORS
Section 1. Executive Committee. The board of directors may
appoint an Executive Committee whose membership shall consist of such members
of the board of directors as it may deem advisable from time to time to serve
during the pleasure of the board. The board of directors may also appoint
directors to serve as alternates for members of the Executive Committee in the
absence or disability of regular members. The board of directors may fill any
vacancies in the Executive Committee as they occur. The Executive Committee, if
there be one, shall have and may exercise the powers of the board of directors
in the management of the business affairs' and property of the corporation
during the intervals between meetings of the board of directors, subject to
law and to such limitations and control as the board of directors may impose
from time to time.
Section 2. Other Committees. The board of directors may
designate such other committees as it may deem appropriate, and such committees
shall exercise the authority delegated to them.
Section 3. Meetings. Each committee provided for above shall
meet as often as its business may require and may fix a day and time for
regular meetings, notice of which shall not be required. Whenever the day fixed
for a meeting shall fall on a holiday, the meeting shall be held on the
business day following or on such other day as the committee may determine.
Special meetings of committees may be called by any member, and notice thereof
may be given to the members by telephone, telegram or letter. A majority of
its members shall constitute a quorum for the transaction of the business of
any of the committees. A record of the proceedings of each committee shall be
kept and presented to the board of directors.
<PAGE> 7
Section 4. Substitutes. In the absence or disqualification of
a member of a committee, the members thereof present at a meeting and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the board to act at the meeting in place
of such absent or disqualified member.
ARTICLE VII
OFFICERS
Section 1. Appointment. The board of directors at its first
meeting after the annual meeting of shareholders, or as soon as practicable
after the election of directors in each year, shall appoint a President and may
elect a Chairman of the Board. The board of directors may also appoint one or
more Vice Presidents and shall appoint a Secretary and a Treasurer. None of
such officers, except the Chairman of the Board, need be members of the board.
The board from time to time may appoint such other officers as they may deem
proper. The dismissal of an officer, the appointment of an officer to fill the
place of one who has been dismissed or has ceased for any reason to be an
officer, the appointment of any additional officers, and the change of an
officer to a different or additional office, may be made by the board of
directors at any later meeting. Any two (2) or more offices may be filled by
the same person. The President, the Vice Presidents (if any), the Secretary,
and the Treasurer shall be the executive officers of the corporation.
Section 2. Term of Office. Each officer shall hold office at
the pleasure of the board. The board of directors may remove any officer for
cause or without cause. Any officer may resign his office at any time,
such resignation to take effect upon receipt of written notice thereof by the
corporation unless otherwise specified in the resignation. If any office
becomes vacant for any reason, the vacancy may be filled by the board.
Section 3. Chairman of the Board. The Chairman of the Board,
if there be one, shall, when present, preside at all meetings of the directors
and shareholders. He shall have such other duties and powers as may be imposed
or given by the board.
Section 4. President. The President shall be the chief
executive officer of the corporation, and, unless there shall be a Chairman of
the Board, or, if there be one, in the event of his death, resignation,
absence, or inability, shall preside at all meetings of the shareholders, and,
if he shall be a director, at all meetings of the board of directors. He shall
have final authority, subject to the control of the board of directors, over
the general policy and business of the corporation and shall have the general
control and management of the business and affairs of the corporation. The
President shall have the power, subject to the control of the board of
directors, to appoint or discharge and to prescribe the duties and to fix the
compensation of such agents and employees of the corporation as he may deem
necessary. He shall make and sign bonds, mortgages, and other contracts and
agreements in the name and on behalf of the corporation, except when he or the
board of directors by resolution instruct the same to be done by some other
officer or agent. He shall see that all orders and resolutions of the board of
directors are carried into effect and shall perform all other duties necessary
or appropriate to his
<PAGE> 8
office, subject, however, to his right and the right of the directors to
delegate any specific powers to any other officer or officers of the
corporation.
Section 5. Vice Presidents. Each Vice President shall have such
title and powers and perform such duties as may be assigned to him from time to
time by the President or the board of directors. In case of the absence or
inability to act of the President, the duties of his office shall, unless
otherwise specified by these Bylaws, be performed by the Vice Presidents in the
order of seniority or priority established by the board or by the President,
unless and until the board shall otherwise direct, and, when so acting, the
duly authorized Vice President shall have all the powers of, and be subject to
the restrictions upon, the President.
Section 6. Secretary. The Secretary shall cause to be
maintained minutes of all meetings of the board and of the shareholders and
shall keep a record of all votes at such meetings. The Secretary shall give, or
see to the giving of notice of all meetings of the shareholders and of the
board of directors, and shall perform such other duties as may be prescribed by
the board of directors or the President.
Section 7. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities, except as otherwise provided by the board,
and shall cause to be kept full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the board of
directors. He shall disburse the funds of the corporation as may be ordered by
the board, and shall render to the President and the directors, whenever they
may require it, an account of all transactions and of the financial condition
of the corporation.
Section 8. Assistant Secretaries and Treasurers. There may be
elected one or more Assistant Secretaries and Assistant Treasurers who may, in
the absence, disability, or nonfeasance of the Secretary or Treasurer, perform
the duties and exercise the powers of such persons respectively.
Section 9. Other Officers. All other officers, as may from time
to time be appointed by the board of directors pursuant to this Article, shall
perform such duties and exercise such authority as the board of directors or
the President shall prescribe.
Section 10. Absence of Officer. In the case of the absence of
any officer, or for any other reason that the board may deem sufficient, the
President or the board may delegate for the time being the powers or duties of
such officer to any other officer or to any director.
ARTICLE VIII
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the Chairman of the Board, the
<PAGE> 9
President or a Vice President, and by the Treasurer, or an Assistant Treasurer,
or the Secretary, or an Assistant Secretary, of the corporation, certifying the
number of shares owned by him in the corporation. The certificate may, but need
not, be sealed with the seal of the corporation, or a facsimile thereof.
Section 2. Facsimile Signatures. Where a certificate is
countersigned by a transfer agent or an assistant transfer agent, or registered
by a registrar other than the corporation or its employee, the signatures of
the officers may be facsimile. In case any officer who has signed, or whose
facsimile signature has been placed upon a certificate, shall have ceased to be
such officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of
issue.
Section 3. Substituted Certificates. The officers may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue
of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation on account of the
certificate alleged to have been lost or destroyed, or the issuance of such new
certificate.
Section 4. Registered Owner. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, to vote as such owner, and to have all of
the other rights and responsibilities of the owner of such shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by statute.
ARTICLE IX
INDEMNIFICATION
Section 1. Indemnification Other Than in Actions in the Right of
the Corporation. Any person who was or is a party or is threatened to be made
a party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
shall be indemnified by the corporation against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of
<PAGE> 10
the corporation, or its shareholders, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, or its shareholders, or, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Indemnification in actions by or in the Right of the
Corporation. Any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise shall be indemnified by the
corporation against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, or its
shareholders, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
Section 3. Expenses. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
1 or 2 of this Article, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Section 4. Authorization of Indemnification. Any
indemnification under Sections 1 or 2 of this Article (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee,
or agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in this Article. Such determination shall be
made (1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel (who may be
the regular counsel of the corporation) in a written opinion, or (3) by the
shareholders.
Section 5. Advancing of Expenses. Expenses incurred in
defending a civil or criminal action, suit, or proceeding described in Sections
1 or 2 of this Article may be paid by the corporation in advance of the final
disposition of such action, suit, or proceeding as authorized by the board of
directors in the manner provided in Section 3 upon receipt of an undertaking by
or on behalf of the director, officer, employee, or agent to repay such amount
unless it shall
<PAGE> 11
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
Section 6. Indemnification Hereunder Not Exclusive. The
indemnification provided by this Article shall not be deemed exclusive of any
other rights to which a party seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent, and shall inure
to the benefit of the heirs, executors, and administrators of such a person.
Section 7. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under 'the provisions of this Article.
Section 8. Mergers. For the purposes of this Article,
references to the "corporation" include all constituent corporations absorbed
in a consolidation or merger, as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employee, or
agent of such a constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as he would if he had served
the resulting or surviving corporation in the same capacity.
ARTICLE X
GENERAL PROVISIONS
Section 1. Checks. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time designate.
Section 2. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the board of directors.
Section 3. Seal. The corporate seal, if any, shall have
inscribed thereon the name of the corporation. The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
Section 4. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if
any, may be declared by the board of directors
<PAGE> 12
at any regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of capital stock, subject to the provisions of
the Articles of Incorporation.
Section 5. Reserves. Before payment of any dividends, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their sole discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
ARTICLE XI
AMENDMENTS
Section 1. These Bylaws may be amended, altered, changed, added
to, or repealed at any regular meeting of the shareholders or of the board of
directors or at any special meeting of the shareholders or of the board of
directors, provided, that any Bylaw adopted by the shareholders which expressly
so states shall not be altered, amended, or repealed by the board of directors.
ARTICLE XII
SUBSIDIARIES AND DIVISIONS
Section 1. Divisional Officers. The board of directors or the
President may, as they shall deem necessary, designate certain individuals as
divisional officers. Any titles given to divisional officers may be withdrawn
at any time, without cause, by the board of directors or the President. A
divisional officer may, but need not be, a director or an executive officer of
the corporation. All divisional officers shall perform such duties and exercise
such authority as the board of directors or the President shall prescribe.
Section 2. Subsidiaries. The board of directors or the President
may vote the shares of stock owned by the corporation in any subsidiary,
whether wholly or partly owned by the corporation, in such manner as they may
deem in the best interests of the corporation, including, without limitation,
for the election of directors of any such subsidiary corporation, or for any
amendments to the charter or bylaws of any such subsidiary corporation, or for
the liquidation, merger, or sale of assets of any such subsidiary corporation.
The board of directors or the President may cause to be elected to the board of
directors of any such subsidiary corporation such persons as they shall
designate, any of whom may, but need not be, directors, executive officers, or
other employees or agents of the corporation. The board of directors or the
President may instruct the directors of any such subsidiary corporation as to
the manner in which they are to vote upon any issue properly coming before them
as the directors of such subsidiary corporation, and such directors shall have
no liability to the corporation as the result of any action taken in accordance
with such instructions.
<PAGE> 13
Section 3. Divisional and Subsidiary Officers Not Executive
Officers. Divisional officers, and the officers of any subsidiary corporation,
shall not, by virtue of holding such title and position, be deemed to be
executive officers of the corporation, nor shall any such divisional officer
or officer of a subsidiary corporation, unless he shall also be a director or
executive officer of the corporation, be entitled to have access to any files,
records or other information relating or pertaining to the corporation, its
business and finances, or to attend or receive the minutes of any meetings of
the board of directors or any committee of the corporation, except as and to
the extent expressly authorized and permitted by the board of directors or the
President.
<PAGE> 1
Exhibit T3-C
================================================================================
BISSELL INC.
SUBORDINATED NOTES
-----------------------------
INDENTURE
Dated as of March 15, 1998
-----------------------------
FIRST OF AMERICA BANK, N.A.
Trustee
-----------------------------
================================================================================
<PAGE> 2
INDENTURE dated as of March 15, 1998 between BISSELL INC., a Michigan
corporation (the "Company") and First of America Bank, N.A., a national banking
corporation ("Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the [__]% Subordinated
Notes of the Company having a final maturity of June 30, 2008 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee thereof.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Company" has the meaning set forth in the preamble hereto.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof; provided, however, for the purpose
of presentation of Notes for payment, transfer or exchange and maintenance of
the registration books, such term shall mean the office at which the Trustee
conducts its corporate agency business, or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Event of Default" has the meaning assigned to it in Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other
<PAGE> 3
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"Holder" means a holder of any of the Notes.
"Indebtedness" means any indebtedness of the Company, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or representing Capital
Lease Obligations or the balance deferred and unpaid of the purchase price of
any property (other than contingent or "earnout" payment obligations) or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability upon a balance sheet of the Company prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien
on any asset of the Company (whether or not such indebtedness is assumed by the
Company) and, to the extent not otherwise included, the Guarantee by the
Company of any indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Interest Payment Date" means March 31, June 30, September 30 and December
31 in any applicable year
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of Grand Rapids, Michigan, Kalamazoo, Michigan, or at
a place of payment are authorized by law, regulation or executive order to
remain closed. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to the Company, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of the Company.
3
<PAGE> 4
"Officer's Certificate" means a certificate signed on behalf of the
Company by the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer or the
Treasurer of the Company, that meets the requirements set forth in Section
11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof.
"Paying Agent" has the meaning assigned to it in Section 2.03 hereof.
"Permitted Junior Securities" means equity securities of the Company or
debt securities of the Company that are subordinated in right of payment to all
Senior Debt and all securities issued in exchange for Senior Debt that may at
the time be outstanding, to substantially the same extent as, or to a greater
extent than, the Notes.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Record Date" means, with respect to any Interest Payment Date, the 15th
day of the preceding calendar month.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt who shall have given notice in writing to
the Trustee that it serves in such capacity with respect to Senior Debt.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee assigned to
perform the duties of Trustee hereunder and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Registrar" has the meaning assigned to it in Section 2.03 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means all Indebtedness from time to time outstanding unless
the instrument under which such Indebtedness is incurred expressly provides
that it is on a parity with or subordinated in right of payment to the Notes.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall
not include (1) any liability for federal, state, local or other taxes owed or
owing by the Company, (2) any trade payables, (3) Indebtedness which, when
incurred and without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to the Company, and (4) Indebtedness
evidenced by the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section Section
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such in the preamble hereto until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
4
<PAGE> 5
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified' means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor upon
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; provisions apply to successive events and
transactions; and
(5) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto. The Notes may have
notations, legends or endorsements required by law, applicable stock exchange
rule, if any, or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
The Notes shall be issued only in registered form, without coupons, in
denominations which are in integral multiples of $[___]. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
5
<PAGE> 6
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by one
Officer, authenticate Notes for original issue up to the aggregate principal
amount $[_________]. The aggregate principal amount of Notes outstanding at any
time may not exceed such amount except as provided in Section 2.08 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ( "Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one additional
paying agent. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company may
act as Paying Agent or Registrar.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of and interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company) shall have no further liability for the money
delivered to the Trustee. If the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is
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not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange. When Notes are presented by a Holder to the
Registrar with a request:
(x) to register the transfer of the Notes; or
(y) to exchange such Notes for an equal principal amount of
Notes of authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however, that
the Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar duly executed by such
Holder or by his or her attorney, duly authorized in writing; and
(ii) such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Note is being delivered to the Registrar by a
Holder for registration in the name of such Holder, without
transfer, or such Note is being transferred to the Company, a
certification to that effect from such Holder (in substantially the
form of Exhibit B hereto);
(B) if such Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form of Exhibit
B hereto); or
(C) if such Note is being transferred in reliance on any
exemption from the registration requirements of the Securities Act,
a certification to that effect from such Holder (in substantially
the form of Exhibit B hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably acceptable to the Company and
to the Registrar to the effect that such transfer is in compliance
with the Securities Act and all applicable state or foreign
securities laws.
(b) Legends.
(i) Each Note certificate evidencing a Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear legends in
substantially the following form:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND (A) MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (2) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH CASE,
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
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THE STATES OF THE UNITED STATES AND ANY FOREIGN JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
(c) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges which are in
compliance with the provision of this Section 2.06, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or similar governmental charge
payable in connection therewith (other than any such taxes or similar
governmental charge payable upon exchange or transfer).
(iii) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
(iv) The Company shall not be required to register the transfer of
or to exchange a Note between a Record Date and the next succeeding
Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes, and neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vi) The Trustee shall authenticate Notes in accordance with the
provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by an Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the reasonable judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge such Holder for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding. Except as
set forth in Section 2.09 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07 hereof.
If any portion of the principal amount of any Note is considered paid
under Sections 3.05 or 4.01 hereof, such portion ceases to be outstanding and
interest on such portion ceases to accrue.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to any applicable record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.11. DEFAULTED INTEREST OR PRINCIPAL.
If the Company defaults in the payment of an installment of interest or
principal on the Notes, it shall pay the defaulted interest or principal in any
lawful manner to the Persons who are Holders on a subsequent special Record
Date. Subject to the requirement that the Company must pay all defaulted
interest on the Notes before paying any defaulted principal, the Company shall
notify the Trustee in writing of any default under clauses (i) or (ii) of
Section 6.01 and the amount of defaulted interest or principal proposed to be
paid on the Notes and the date of the proposed payment. The Company shall fix
or cause to be fixed each such special Record Date and payment date, provided
that no such special Record Date shall be less than 10 days prior to the
related payment date for such defaulted interest or principal. At least 15 days
before the special Record Date, the Company (or, upon the written request of
the Company, the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the special Record
Date, the related payment date and the amount of such interest or principal, or
both, to be paid.
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SECTION 2.12. REQUIREMENT FOR SURRENDER OF NOTES UPON FINAL MATURITY OR
PREPAYMENT.
Each Holder of a Note, as a condition to the payment to such Holder of any
amount of principal which is being prepaid by the Company and to the payment to
such Holder of an amount representing the remaining principal due on such Note,
whether at the date specified for payment thereof in such Note or upon
prepayment thereof, shall surrender the same to the Paying Agent. If after such
payment with respect to any Note so surrendered, any principal will remain due
thereon, the Paying Agent shall deliver such Note to the Company and the
Company shall promptly return it to the Holder surrendering the same after
placing a notation thereon of the amount of principal prepaid and the date of
such prepayment. If no further interest or principal is due with respect to a
Note so surrendered, the Paying Agent shall deliver the same to the Trustee for
cancellation and the Trustee shall destroy canceled Notes (subject to any
applicable record retention requirement of the Exchange Act). The Company, by
written notice to the Trustee, may waive the requirement for surrender of Notes
either before or after payment of the last installment of principal or any
prepayment.
ARTICLE 3
PREPAYMENT
SECTION 3.01. COMPANY'S RIGHT TO PREPAY THE NOTES.
The Company has the right to prepay the Notes in whole or in part on any
Interest Payment Date. All prepayments shall be applied ratably to all Notes
outstanding. Any partial prepayment shall be applied against installments of
principal due on the Notes in the inverse order of the maturities of such
installments. Prepayments shall be made only to the Persons who are registered
Holders of the Notes on the applicable Record Date and shall be subject to the
requirements of Section 2.12.
SECTION 3.02. NOTICES TO TRUSTEE.
If the Company elects to prepay the Notes in whole or in part, it shall
furnish to the Trustee, at least 45 days but not more than 60 days before the
Interest Payment Date on which such prepayment will be made, an Officer's
Certificate setting forth (i) the Interest Payment Date on which such
prepayment is to be made, and (ii) the amount of principal to be prepaid.
SECTION 3.03. NOTICE OF PREPAYMENT.
At least 30 days but not more than 60 days before an Interest Payment Date
on which a prepayment shall be made, the Company shall mail or cause to be
mailed, by first class mail, a notice to each current Holder of Notes at their
registered address.
The notice shall state:
(a) the Interest Payment Date on which the prepayment shall be made;
(b) the amount of the prepayment;
(c) if the Notes are being prepaid in part, the portion of the principal
amount of the Notes being prepaid and to be outstanding thereafter and that,
after the Interest Payment Date on which the prepayment is being made and upon
surrender of the Notes, the Notes shall be returned to the Holders after the
Company shall place thereon a notation of the amount prepaid and the date of
such prepayment;
(e) the name and address of the Paying Agent;
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(e) that the Notes must be surrendered to the Paying Agent to collect the
amount being prepaid; and
(f) that, unless the Company defaults in making such prepayment, interest
on the amount being prepaid ceases to accrue on and after the Interest Payment
Date on which the prepayment is being made.
At the Company's request, the Trustee shall give the notice of prepayment
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the Interest
Payment Date on which the prepayment is to be made, an Officer's Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF PREPAYMENT.
Once notice of prepayment is mailed in accordance with Section 3.03
hereof, the amount to be prepaid shall become irrevocably due and payable by
the Company on the specified Interest Payment Date. A notice of prepayment may
not be conditional.
SECTION 3.05. DEPOSIT OF PREPAYMENT AMOUNT.
On or before 10:00 a.m. Eastern Time on the interest date specified for
any prepayment, the Company shall deposit with the Trustee or with the Paying
Agent immediately available funds sufficient to pay the amount to be prepaid
and all regularly due principal and accrued interest on all Notes due on such
Interest Payment Date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the amount to be prepaid on
the Notes and all regularly due principal and accrued interest on the Notes on
such Interest Payment Date.
If the Company complies with the provisions of the preceding paragraph,
on and after the Interest Payment Date on which the prepayment is to be made,
interest shall cease to accrue on the principal portions of Notes being prepaid
whether or not such Notes are presented for such prepayment. If the Notes are
not prepaid in whole or in part upon surrender for prepayment because of the
failure of the Company to comply with the preceding paragraph, interest shall
be paid on the unpaid principal, from the Interest Payment Date on which the
prepayment was to be made until such principal is paid.
SECTION 3.06. NOTES PREPAID IN PART.
Upon surrender of a Note that has been prepaid in part, the Company shall
return the same to the Holder after placing a notation thereon of such
prepayment.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of and interest on
the Notes on the dates and in the manner provided in the Notes. Principal and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company, holds as of 10:00 a.m. Eastern Time on the due date money
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deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal and interest then due.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the State of Michigan an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the State of
Michigan for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS BY COMPANY.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) which the Company may be required to
file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with the
Trustee and the SEC, in accordance with rules and regulations prescribed
from time to time by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(2) file with the Trustee and the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in records of the Registrar within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the SEC; and
(4) furnish to Trustee not less often than annually an Officer's
Certificate specifying such Officer's knowledge of the Company's
compliance with the conditions and covenants of this Indenture,
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and if the Company shall be in default, specify all such defaults and
the nature and status thereof of which such Officer may have knowledge.
The Company shall at all times comply with TIA Section 314(a).
SECTION 4.04. TAXES.
The Company shall pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Notes.
SECTION 4.05. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence in accordance with its articles of incorporation (as the
same may be amended from time to time), and (ii) the rights (charter and
statutory), licenses and material franchises of the Company; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; and (iii) immediately after such transaction no
Default or Event of Default exists.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into which or with which the
Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for, the Company (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the successor
corporation and not to the Company), and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest on the
Notes (whether or not prohibited by Article 9 hereof);
(ii) default for five days in the payment when due of any principal
on the Notes (whether or not prohibited by Article 9 hereof);
(iii) failure by the Company for 30 days after notice from the
Trustee or the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes to comply with the provisions described under
Article 5 hereof;
(iv) failure by the Company for 60 days after notice from the
Trustee or the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes to comply with any of its other agreements in
this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (or the payment of which
is guaranteed by the Company) whether such Indebtedness or guarantee now
exists, or is created after the date hereof, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness the maturity of which
has been so accelerated, aggregates $5.0 million or more;
(vi) failure by the Company to pay final judgments aggregating in
excess of $5.0 million, which judgments are not paid, discharged or
stayed for a period of 60 days;
(vii) the Company pursuant to or within the meaning of Bankruptcy
Law;
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due; or
(viii) a court of competent jurisdiction enters an order or decree
in an involuntary case or proceeding under any Bankruptcy Law that:
(a) is for relief against the Company;
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(b) appoints a custodian of the Company or for all or
substantially all of the Company; or
(c) orders the liquidation of the Company; or
if any petition for the foregoing relief shall be filed against the
Company and such petition remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under clause (iv)
of this Section 6.01 until the Trustee notifies the Company, or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes notify
the Company and the Trustee, of the Default and the Company does not cure the
Default within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration all principal and interest on the Notes shall become immediately
due and payable.
At any time after a declaration of acceleration with respect to the Notes,
the Holders of a majority in aggregate principal amount of the Notes may
rescind and cancel such declaration and its consequences (i) if the rescission
would not conflict with any judgment or decree, (ii) if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration, (iii) if the Company
has paid the Trustee its reasonable compensation and reimbursed the Trustee for
its expenses, disbursements and advances and (iv) if, in the event of the cure
or waiver of an Event of Default of the type described in clauses (vii) or
(viii) of Section 6.01 hereof, the Trustee shall have received an Officer's
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal and interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under this Indenture, except, subject to the second paragraph of
Section 6.02 hereof, a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes
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(including the failure to make any prepayment as to which notice was given to
the Holders of the Notes pursuant to Section 3.03) or a Default or Event of
Default with respect to any covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on
or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of and interest remaining unpaid on the Notes and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute any
money or other property payable or deliverable on any such claims and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties relating to the Notes or that the Holders may be entitled to receive
in such proceeding whether in liquidation or under any plan of reorganization
or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for any amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances, made by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal and interest ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee, upon prior notice to the Company, may fix a Record Date and
payment date for any payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than
10% in principal amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the duties, rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default actually known to
the Trustee:
(i) the Trustee shall not be liable hereunder except for such duties
of the Trustee which shall be determined solely by the express provisions
of this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee shall not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability whatsoever in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers
hereunder. The Trustee shall be under no obligation to exercise any of its
duties under this Indenture at the request of any Holders, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to it in
its reasonable judgment against any loss, liability or expense that might be
incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel and other experts and the advice of such counsel or expert or any
Opinion of Counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent (other than an agent
who is an employee of the Trustee) chosen in good faith.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it reasonably believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to it in its reasonable judgment against any loss,
liability or expense that might be incurred by it in compliance with such
request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in accordance with the requirements of the TIA, in the event that the Trustee
acquires any conflicting interest as enumerated under Section 310 of the TIA
it must eliminate such conflict within 90 days or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the issuance of the Notes or pursuant
to this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except
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in the case of a Default or Event of Default in payment of principal of or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each March 1 beginning with the March 1 following the
date hereof, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company, each stock exchange on which the Notes are
listed and the SEC in accordance with TIA Section 313(d).
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee upon demand from time to time
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services, except any
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or willful misconduct. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
reasonable costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or willful misconduct. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property
relating to the Notes or held or collected by the Trustee, except that held in
trust to pay principal of and interest on particular Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (vii) or (viii) hereof occurs, the expenses
and the compensation for the services (including the reasonable fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
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As to notice of liens or charges, the Trustee shall comply with the
provisions of TIA Section 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying, the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall, if such resulting
surviving or transferee corporation is otherwise eligible hereunder, be the
successor Trustee.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has or has a corporate parent that has a combined
capital and surplus of at least $100.0 million as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 8.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 8.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations to Holders
of Notes in the case of a merger or consolidation pursuant to
Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect
the legal rights hereunder of any Holder of a Note; or
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the execution
of any amended or supplemental Indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 8.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 8.02, this Indenture or the Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and, subject to Sections
6.02, 6.04 and 6.07 hereof, any existing Default or
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Event of Default (other than a Default or Event of Default in the payment of
principal of or interest on the Notes) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
In addition, any amendment to the provisions of Article 9 hereof will
require the consent of the Holders of at least 75% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely affect
the rights of the Holders of the Notes.
Upon the request of the Company accompanied by a resolution of the Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 8.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 8.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.02, 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not:
(i) reduce the principal amount of or interest on Notes whose
Holders must consent to an amendment, supplement or waiver;
(ii) reduce the principal of, interest on or change the fixed
maturity of any installment of principal on any Notes;
(iii) reduce the interest rate of or change the time for payment on
any Note;
(iv) waive a Default or Event of Default in the payment of principal
of or interest on the Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount
of the Notes and a waiver of the payment default that resulted from such
acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;
(vii) waive any prepayment with respect to which notice has been
given to the Holders pursuant to Section 3.03 hereof; or
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(viii) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 8.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to his/her Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a Record Date for the
purpose of determining the Holders of Notes entitled to consent to any
amendment, supplement or waiver. If a Record Date is fixed, then
notwithstanding the provisions of the second sentence of the preceding
paragraph, those Holders of Notes who were Holders on such Record Date (or
their duly designated proxies), and only those Holders, shall be entitled to
revoke any consent previously given, whether or not such Holder of Notes
continues to be a Holder of Notes after such Record Date. No such consent shall
be valid or effective for more than 90 days after such Record Date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder of Notes; provided that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal of and interest on the
Notes, on or after the respective due dates expressed in such Notes, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder of Notes.
SECTION 8.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may (but is not required to) place an appropriate notation
about an amendment, supplement or waiver on any Note thereafter authenticated.
If an amendment, supplement or waiver changes the terms of the Notes, the
Company may require the Holders of the Notes to deliver the Notes to the
Trustee. The Company may place an appropriate notation on the Notes and return
them to the Holders. Alternatively, the Company in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 8 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. The Company may not sign an
amendment or supplemental Indenture until the Board of Directors approves it.
In executing any amended or supplemental indenture, the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in
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relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 9
SUBORDINATION
SECTION 9.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder of Notes by accepting a Note agrees,
that the payment of principal of and interest on, and all other Obligations in
respect of, the Notes (including, without limitation, any prepayment due on the
Notes scheduled as provided in Section 3.01, hereof, but not including the
Trustee's right to payment under Section 7.07) will be subordinated in right of
payment, to the extent and in the manner as set forth in this Article 9, to the
prior payment in full in cash of all Senior Debt, whether outstanding on the
date hereof or hereafter incurred.
SECTION 9.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(1) the holders of Senior Debt shall be entitled to receive payment in
full in cash of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the documents relating to the applicable Senior Debt, whether or not the claim
for such interest is allowed as a claim in such proceeding) before the Holders
of Notes shall be entitled to receive any payment on account of any Obligations
with respect to the Notes (except that all Holders of Notes may receive
Permitted Junior Securities); and
(2) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full in cash, any distribution to which
Holders of Notes would be entitled but for this Article 9 shall be made to
holders of Senior Debt, as their interests may appear (except that Holders of
Notes may receive Permitted Junior Securities).
SECTION 9.03. DEFAULT ON SENIOR DEBT.
The Company may not make any payment or distribution to the Trustee or any
Holder of Notes on account of any Obligations in respect of the Notes (except
payments to the Trustee under Section 7.07) and may not acquire from the
Trustee or any Holder of Notes any Notes for cash or property (other than
Permitted Junior Securities) until all principal and other Obligations with
respect to the Senior Debt have been paid in full in cash if:
(i) a default in the payment of any principal or other Obligations
with respect to Senior Debt occurs and is continuing beyond any
applicable grace period (including any default in payment upon the
maturity of any Senior Debt by lapse of time, acceleration or otherwise)
in the agreement, indenture or other document governing such Senior Debt,
or any judicial proceeding is pending to determine whether any such
default has occurred; or
(ii) any other default occurs and is continuing with respect to
Senior Debt that then permits, or would permit, with the passage of time
or the giving of notice or both, holders of the Senior Debt as to which
such default relates to accelerate its maturity.
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The Company may and shall resume payments on and distributions in respect
of the Notes and may acquire them upon the earlier of:
(1) in the case of a payment default referred to in clause (i)
above, upon the date on which the default is cured or waived or otherwise
ceases to exist, unless another default, event of default or other event
that would prohibit such payment shall have occurred and be continuing,
or all Obligations in respect of such Senior Debt shall have been paid in
full in cash; or
(2) in the case of a nonpayment default referred to in clause (ii)
above, the date on which such nonpayment default is cured or waived.
SECTION 9.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated by the Trustee because of an Event
of Default, the Trustee shall promptly notify the Representatives for the
Senior Debt of the acceleration but the Trustee shall not be liable for failure
to give such notice.
SECTION 9.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when such payment is prohibited
under the terms of this Indenture, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered to the holders of Senior Debt as their interests may appear or their
Representatives, as their respective interests may appear, for application to
the payment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in cash in accordance with
their terms, after giving effect to any payment or distribution to or for the
holders of Senior Debt made concurrently with such payment received by the
Trustee or such Holder. Any distribution to the holders of Senior Debt or their
Representatives of assets other than cash may be held by such holders or such
Representatives as additional collateral without any duty to the Holder of
Notes to liquidate or otherwise realize on such assets or to apply such assets
to any Senior Debt or other Obligations relating thereto.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 9, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of Notes or the
Company or any other Person money or assets to which any holders of Senior Debt
shall be entitled by virtue of this Article 9, except if such payment is made
as a result of the willful misconduct or negligence of the Trustee.
SECTION 9.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Obligations with
respect to the Notes to violate this Article 9, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article 9.
SECTION 9.07. SUBROGATION.
After all Senior Debt is paid in full in cash and until the Notes are paid
in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise
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payable to the Holders have been applied to the payment of Senior Debt. A
distribution made under this Article 9 to holders of Senior Debt that otherwise
would have been made to Holders is not, as between the Company and Holders, a
payment by the Company on the Notes.
SECTION 9.08. RELATIVE RIGHTS.
This Article 9 defines the relative rights of Holders of Notes and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Debt to receive distributions and payments otherwise
payable to or received by Holders.
If the Company fails because of this Article 9 to pay principal of or
interest on a Note on the due date, the failure is nevertheless a Default or
Event of Default.
SECTION 9.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture regardless of any knowledge thereof that any such
Holder of Notes or holder of Senior Debt, as the case may be, may have or be
otherwise charged with. The holders of Senior Debt may extend, renew, restate,
supplement, modify or amend the terms of the Senior Debt or any Obligations
with respect thereto or any security therefor and release, sell or exchange
such security and otherwise deal freely with the Company and its Affiliates all
without incurring responsibility to any Holder or the Trustee, without
impairing or releasing the obligations of any Holder or the Trustee to the
holders of Senior Debt, and without affecting the liabilities and obligations
of the parties to this Indenture or the Holders.
Each Holder of the Notes by its acceptance thereof: (a) acknowledges and
agrees that the holders of any Senior Debt or their Representative, in its or
their discretion, and without affecting any rights of any holder of Senior Debt
under this Article 9, may foreclose any mortgage or deed of trust covering
interest in real property securing such Senior Debt or any guarantee thereof by
judicial or nonjudicial sale, even though such action may release the Company
or any guarantor of such Senior Debt from further liability under such Senior
Debt or any guarantee thereof or may otherwise limit the remedies available to
the holders thereof; and (b) hereby waives any defense that such Holder may
otherwise have to the enforcement by any holder of any Senior Debt or its
Representative against such Holder of this Article 9 after or as a result of
any action, including any such defense based on any loss or impairment of
rights of subrogation.
If at any time any payment of Obligations with respect to any Senior Debt
is rescinded or must otherwise be returned upon the insolvency, bankruptcy,
reorganization or liquidation of the Company or otherwise, the provisions of
this Article 9 shall continue to be effective or reinstated, as the case may
be, to the same extent as though such payments had not been made.
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SECTION 9.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representatives.
Upon any payment or distribution of assets of the Company referred to in
this Article 9, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such Representatives or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 9.
SECTION 9.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 9 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, or the taking of any action by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the Notes,
unless the Trustee shall have received at its Corporate Trust Office at least
five Business Days prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to the Notes to
violate this Article 9. Only the Company or a Representative or a holder of
Senior Debt that has no Representative may give the notice. Nothing in this
Article 9 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof. Nothing in this Section 9.11 is intended to or
shall relieve any Holder from the obligations imposed under Section 9.05 hereof
with respect to monies or other distributions received in violation of the
provisions hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 9.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 9, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes, including, in the event of any insolvency,
bankruptcy or receivership case or proceeding or any dissolution, winding-up,
liquidation, reorganization or other similar proceedings relative to the
Company (whether voluntary or involuntary and whether in bankruptcy, insolvency
or receivership proceedings or otherwise), the timely filing of a claim for the
unpaid balance of the Notes of such Holder in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the holders of Senior Debt and any
Representative are hereby authorized, and shall have the right (without any
duty), to demand, sue for, collect, and receive the payments and distributions
in respect of the Notes which are required to be paid or delivered to the
holders of the Senior Debt as provided in this Article 9, and to file and prove
all claims therefor.
The Company, the Trustee and each Holder by their acceptance of the Notes,
acknowledge that damages would be inadequate to compensate the holders of
Senior Debt for any breach or default by the Company, the Trustee or any such
Holder of its obligations under this Article 9, and, therefore, agree that the
holders of Senior Debt and their Representatives shall be entitled to equitable
relief, including injunctive relief and specific performance, in the
enforcement thereof.
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SECTION 9.13. THIRD PARTY BENEFICIARY, ETC.
The foregoing provisions regarding subordination are solely for the
purpose of defining the relative rights of the holders of Senior Debt on the
one hand and the Holders of Notes on the other hand. Such provisions are for
the benefit of the holders of Senior Debt (and their successors and assigns)
and shall be enforceable by them directly against the Holders (and their
successors and assigns). This Article 9 shall constitute a continuing offer to
all Persons who become holders of, or who continue to hold, Senior Debt
(whether such Senior Debt was created or acquired before or after the issuance
of the Notes).
ARTICLE 10
SATISFACTION AND DISCHARGE
SECTION 10.01. SATISFACTION AND DISCHARGE OF THE INDENTURE
This Indenture will be discharged and will cease to be of further effect
as to all outstanding Notes when:
(a) all Notes theretofore authenticated and delivered (except lost, stolen
or destroyed Notes which have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Company) have been delivered to Trustee for cancellation; or
(b) (i) all Notes not theretofore delivered to Trustee for cancellation
have become due and payable by reason of the making of a notice of prepayment
or otherwise and the Company has irrevocably deposited or caused to be
deposited with Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on the Notes not
theretofore delivered to Trustee for cancellation of principal and accrued
interest to the date of maturity or prepayment and (ii) the Company has paid
all sums required to be paid by it under this Indenture.
As previously provided, the obligations of the Company under Section 7.07
shall survive the satisfaction and discharge of this Indenture.
SECTION 10.02. CONDITIONS TO SATISFACTION AND DISCHARGE OF THE INDENTURE
The Company shall deliver an Officers' Certificate to Trustee stating that
all conditions precedent to satisfaction and discharge have been complied with.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the duties imposed by TIA Section 318(c)
shall control.
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SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
BISSELL Inc.
2345 Walker, N.W.
Grand Rapids, Michigan 49544
Telecopier No.: (616) 784-8101
Attention: Chief Financial Officer
With a copy to:
Hecht & Lentz
333 Bridge N.W., Suite 330
Grand Rapids, Michigan 49504
Telecopier No.: (616) 776-7203
Attention: David M. Hecht, Esq.
If to the Trustee:
First of America Bank, N.A.
Trust and Financial Services Division
1001 South Worth
Birmingham, Michigan 48009-6943
Telecopier No.: (248) 901-2457
Attention: Corporate Trust Department
The Company or the Trustee by written notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if sent by registered or certified mail; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives
it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
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SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Trustee
shall comply with Section 312(b). The Company, the Trustee, the Registrar and
any other Person shall have the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee, at the
request of the Trustee:
(a) an Officer's Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied; provided, however, that with respect
to matters of fact, an Opinion of Counsel may rely on an Officer's Certificate
or certificates of public officials.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes or this Indenture or for any claim based on, in
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respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
SECTION 11.08. GOVERNING LAW.
The internal law of the State of Michigan shall govern and be used to
construe this Indenture and the Notes.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or of any other Person. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall bind
their respective successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS; HEADINGS; ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page.]
REMAINING PORTION INTENTIONALLY LEFT BLANK
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Dated as of March 15, 1998 BISSELL INC.
By: ___________________________
Name: ________________________
Title: _________________________
FIRST OF AMERICA BANK, N.A.
By: __________________________
Name: _______________________
Title: ________________________
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<PAGE> 34
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE................. 1
SECTION 1.01. DEFINITIONS. ........................................... 1
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. ..... 5
SECTION 1.03. RULES OF CONSTRUCTION. ................................. 5
ARTICLE 2 - THE NOTES.................................................. 5
SECTION 2.01. FORM AND DATING. ....................................... 5
SECTION 2.02. EXECUTION AND AUTHENTICATION. .......................... 6
SECTION 2.03. REGISTRAR AND PAYING AGENT. ............................ 6
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. ................... 6
SECTION 2.05. HOLDER LISTS. .......................................... 6
SECTION 2.06. TRANSFER AND EXCHANGE. ................................. 7
SECTION 2.07. REPLACEMENT NOTES. ..................................... 8
SECTION 2.08. OUTSTANDING NOTES. ..................................... 9
SECTION 2.09. TREASURY NOTES. ........................................ 9
SECTION 2.10. CANCELLATION. .......................................... 9
SECTION 2.11. DEFAULTED INTEREST OR PRINCIPAL. ....................... 9
SECTION 2.12. REQUIREMENT FOR SURRENDER OF NOTES UPON FINAL
MATURITY OR PREPAYMENT. ................................ 10
ARTICLE 3 - PREPAYMENT................................................ 10
SECTION 3.01. COMPANY'S RIGHT TO PREPAY THE NOTES.
SECTION 3.02. NOTICES TO TRUSTEE..................................... 10
SECTION 3.03. NOTICE OF PREPAYMENT................................... 10
SECTION 3.04. EFFECT OF NOTICE OF PREPAYMENT. ....................... 11
SECTION 3.05. DEPOSIT OF PREPAYMENT AMOUNT. ......................... 11
SECTION 3.06. NOTES PREPAID IN PART. ................................ 11
ARTICLE 4 - COVENANTS................................................. 11
SECTION 4.01. PAYMENT OF NOTES. ..................................... 11
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. ...................... 12
SECTION 4.03. REPORTS BY COMPANY..................................... 12
SECTION 4.04. TAXES. ................................................ 13
SECTION 4.05. CORPORATE EXISTENCE. .................................. 13
ARTICLE 5 - SUCCESSORS................................................ 13
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. ............. 13
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. .................... 13
ARTICLE 6 - DEFAULTS AND REMEDIES..................................... 14
SECTION 6.01. EVENTS OF DEFAULT...................................... 14
SECTION 6.02. ACCELERATION........................................... 15
SECTION 6.03. OTHER REMEDIES......................................... 15
SECTION 6.04. WAIVER OF PAST DEFAULTS. .............................. 15
SECTION 6.05. CONTROL BY MAJORITY. .................................. 16
SECTION 6.06. LIMITATION ON SUITS. .................................. 16
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. ........ 16
SECTION 6.08. COLLECTION SUIT BY TRUSTEE............................. 16
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. ..................... 17
SECTION 6.10. PRIORITIES. ........................................... 17
SECTION 6.11. UNDERTAKING FOR COSTS.................................. 17
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ARTICLE 7 - TRUSTEE.................................................. 18
SECTION 7.01. DUTIES OF TRUSTEE. .................................... 18
SECTION 7.02. RIGHTS OF TRUSTEE. .................................... 19
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. ......................... 19
SECTION 7.04. TRUSTEE'S DISCLAIMER................................... 19
SECTION 7.05. NOTICE OF DEFAULTS. ................................... 19
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. ........... 20
SECTION 7.07. COMPENSATION AND INDEMNITY. ........................... 20
SECTION 7.08. REPLACEMENT OF TRUSTEE. ............................... 21
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. ..................... 21
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. ........................ 22
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...... 22
ARTICLE 8 - AMENDMENT, SUPPLEMENT AND WAIVER.......................... 22
SECTION 8.01. WITHOUT CONSENT OF HOLDERS OF NOTES................... 22
SECTION 8.02. WITH CONSENT OF HOLDERS OF NOTES....................... 22
SECTION 8.03. COMPLIANCE WITH TRUST INDENTURE ACT. .................. 24
SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS...................... 24
SECTION 8.05. NOTATION ON OR EXCHANGE OF NOTES. ..................... 24
SECTION 8.06. TRUSTEE TO SIGN AMENDMENTS, ETC. ...................... 24
ARTICLE 9 - SUBORDINATION............................................. 25
SECTION 9.01. AGREEMENT TO SUBORDINATE. ............................. 25
SECTION 9.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. ................. 25
SECTION 9.03. DEFAULT ON SENIOR DEBT. ............................... 25
SECTION 9.04. ACCELERATION OF NOTES.................................. 26
SECTION 9.05. WHEN DISTRIBUTION MUST BE PAID OVER. .................. 26
SECTION 9.06. NOTICE BY COMPANY...................................... 26
SECTION 9.07. SUBROGATION. .......................................... 26
SECTION 9.08. RELATIVE RIGHTS. ...................................... 27
SECTION 9.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. ......... 27
SECTION 9.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE............... 28
SECTION 9.11. RIGHTS OF TRUSTEE AND PAYING AGENT. ................... 28
SECTION 9.12. AUTHORIZATION TO EFFECT SUBORDINATION.................. 28
SECTION 9.13. THIRD PARTY BENEFICIARY, ETC. ......................... 29
ARTICLE 10 - SATISFACTION AND DISCHARGE............................... 29
SECTION 10.01. SATISFACTION AND DISCHARGE OF THE INDENTURE........... 29
SECTION 10.02. CONDITIONS TO SATISFACTION AND DISCHARGE OF THE
INDENTURE............................................. 29
ARTICLE 11 - MISCELLANEOUS............................................ 29
SECTION 11.01. TRUST INDENTURE ACT CONTROLS. ........................ 29
SECTION 11.02. NOTICES. ............................................. 30
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES................................ 31
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.... 31
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION......... 31
SECTION 11.06. RULES BY TRUSTEE AND AGENTS........................... 31
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS............................ 31
SECTION 11.08. GOVERNING LAW......................................... 32
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. ....... 32
SECTION 11.10. SUCCESSORS............................................ 32
SECTION 11.11. SEVERABILITY.......................................... 32
SECTION 11.12. COUNTERPART ORIGINALS................................. 32
SECTION 11.13. TABLE OF CONTENTS; HEADINGS; ETC. .................... 32
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EXHIBIT A TO INDENTURE
[_____]% SUBORDINATED NOTE
No. _____ $____________
BISSELL Inc., a corporation duly organized and existing under the laws of
Michigan (herein called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _______________________, or registered assigns, the
principal sum of ________________ Dollars payable in seven installments each
equal to one-seventh (1/7th) of such principal sum (but not to exceed the
principal remaining unpaid) payable on each June 30 of the years 2002 through
2008, unless sooner paid, and to pay interest thereon from [_______], 1998 or
from the most recent interest payment date to which interest has been paid or
duly provided for, quarterly on March 31, June 30, September 30 and December 31
in each year (each an "Interest Payment Date"), commencing June 30, 1998,
at the rate of [__]% per annum, until the principal hereof is paid or made
available for payment.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND (A) MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (2) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND ANY FOREIGN JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT
OF THE NOTES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
THE PROVISIONS ON THE REVERSE HEREOF ARE A PART OF THIS NOTE AND
INCORPORATED HEREIN BY REFERENCE.
Dated: ________________
BISSELL Inc.
By_____________________________
Name:
Title:
This is one of the
Notes referred to in the
within-mentioned indenture:
Dated: ________, 1998
First of America Bank, N.A., as Trustee
By: __________________________
Name: _______________________
Title: ________________________
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<PAGE> 37
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. COMPUTATION OF INTEREST. Interest on this Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make or cause to be made payments
in respect of all payments of principal and interest by mailing a check to the
Holder's registered address as determined on the applicable Record Date.
3. PAYING AGENT AND REGISTRAR. Initially, First of America Bank, N.A.,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
Subject to restrictions and requirements for transfer described in the
Indenture, this Note may be presented for registration of transfer and exchange
at the offices of the Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
March 15, 1998 ("Indenture") among the Company and the Trustee. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Section Section 77aaa-77bbbb). The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms.
5. PREPAYMENT. The Company has the right to prepay the Notes in whole or
in part on any interest payment date. All prepayments shall be applied ratably
to all Notes outstanding. Any partial prepayment shall be applied against
installments of principal due on the Notes in the inverse order of the
maturities of such installments. At least 30 days but not more than 60 days
before an interest payment date on which a prepayment shall be made, the
Company shall mail or cause to be mailed, by first class mail, a notice to each
Holder whose Notes are to be redeemed at its registered address providing the
details as to such prepayment.
6. SURRENDER OF NOTE. Each Holder of a Note, as a condition to the payment
to such Holder of any amount of principal which is being prepaid by the Company
and to the payment to such Holder of an amount representing the remaining
principal due on such Note, whether at the date specified for payment thereof
in such Note or upon prepayment thereof, shall surrender the same to the Paying
Agent. If after such payment with respect to any Note so surrendered, any
principal will remain due thereon, the Paying Agent shall deliver such Note to
the Company and the Company shall promptly return it to the Holder surrendering
the same after placing a notation thereon of the amount of principal prepaid
and the date of such prepayment.
7. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in minimum denominations of $[____] and integral multiples of
$[___] in excess thereof. The transfer of Notes may be registered and Notes may
be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes or
similar governmental charge in connection with such transfer or exchange. The
Company need not exchange or register the transfer of any Note during the
period between a Record Date and the corresponding Interest Payment Date.
8. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes, provided that Holders entitled to receive
payments of interest or principal under a Note shall be determined only on the
15th day of the preceding calendar month (the "Record Date").
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<PAGE> 38
9. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of the Notes, to provide for
the assumption of the Company's obligations to Holders of the
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, or to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
10. DEFAULTS AND REMEDIES. Each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest, if any,
on the Notes (whether or not prohibited by Article 9 of the Indenture); (ii)
default for five days in payment when due of any installment of principal on
the Notes (whether or not prohibited by Article 9 of the Indenture); (iii)
failure by the Company for 30 days after notice from the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes to
comply with the provisions described under Article 5 of the Indenture; (iv)
failure by the Company for 60 days after notice from the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes to
comply with any of its other agreements in the Indenture or the Notes; (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company (or the payment of which is guaranteed by the Company)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness the maturity of which has been so accelerated,
aggregates $5.0 million or more; (vi) failure by the Company to pay final
judgments aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; and (vii) certain events of
bankruptcy or insolvency with respect to the Company.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately.
At any time after a declaration of acceleration with respect to the Notes,
the Holders of a majority in aggregate principal amount of the Notes may
rescind and cancel such declaration and its consequences (i) if the rescission
would not conflict with any judgment or decree, (ii) if all existing Events of
Default have been cured or waived except nonpayment of principal or interest,
if any, that have become due solely because of the acceleration, (iii) if the
Company has paid the Trustee its reasonable compensation and reimbursed the
Trustee for its expenses, disbursements and advances and (iv) if, in the event
of the cure or waiver of an Event of Default of the type described in clauses
(vii) or (viii) of Section 6.01 of the Indenture, the Trustee shall have
received an Officer's Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Subject to the second paragraph of Section 6.02 of the Indenture, Holders
of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes waive
any existing Default or Event of Default and its consequences under the
Indenture, except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes or a default with respect to any
covenant or provision which cannot be modified or amended without the consent
of the Holder of each outstanding Note affected.
ii
<PAGE> 39
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
11. SUBORDINATION. Each Holder by accepting a Note agrees that the
payment of principal of and interest on, and all other Obligations in respect
of, each Note is subordinated in right of payment, to the extent and in the
manner provided in Article 9 of the Indenture, to the prior payment in full in
cash of all Senior Debt (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of the Senior Debt.
12. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
13. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
14. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants-in-common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants-in-common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
BISSELL Inc.
2345 Walker, N.W.
Grand Rapids, Michigan 49544
Attention: Chief Financial Officer
iii
<PAGE> 40
ASSIGNMENT FORM
To assign this Note subject to the restrictions and requirements described in
the Indenture, fill in the form below:
(I) or (we) assign and transfer this Note to:
_____________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Date: _____________________ Your Signature:
_____________________________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
iv
<PAGE> 41
EXHIBIT B TO INDENTURE
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER OF
SUBORDINATED NOTES
(Pursuant to Section 2.06 of the Indenture)
First of America Bank, N.A., as Trustee
Trust and Financial Services Division
1001 South Worth
Birmingham, Michigan 48009-6943
Attention: Corporate Trust Department
Re: Subordinated Notes due June 2008 of BISSELL, Inc.
Dear Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of March 15, 1998
(the "Indenture"), among BISSELL, Inc., as issuer (the "Company"), and First of
America Bank, N.A., as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $_________________ principal amount of Notes which
are evidenced by one or more Notes and registered with the Registrar in the
name of ______________ (the "Transferor"). The Transferor has requested an
exchange or transfer of such Note(s) in the form of an equal principal amount
of Notes evidenced by one or more Notes, to be delivered to the Transferor or,
in the case of a transfer of such Notes, to such Person as the Transferor
instructs the Trustee.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
___ the Surrendered Notes are being delivered to the Registrar by
the Holder for registration in the name of the Holder, without
transfer, or such Note is being transferred to the Company;
___ the Surrendered Notes are being transferred pursuant to an
effective registration statement under the Securities Act; or
___ the Surrendered Notes are being transferred in reliance on an
exemption from the registration requirements of the Securities Act
and an Opinion of Counsel from the Holder or the transferee
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act
and all applicable state or foreign securities laws is attached.
v
<PAGE> 42
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and each of you are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
with respect to the materials covered hereby.
____________________________________
Name of Transferor
Dated: _____________________ By: ________________________________
Name: ______________________________
Title: _______________________________
vi
cc: BISSELL, Inc.
2345 Walker, N.W.
Grand Rapids, Michigan 49544
Telecopier No.: (616) 784-8101
Attention: Chief Financial Officer
<PAGE> 1
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
----------------------------
FIRST OF AMERICA BANK, N.A.
(Exact name of trustee as specified in its charter)
A U.S. NATIONAL BANKING ASSOCIATION 38-0861745
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
108 EAST MICHIGAN AVENUE
KALAMAZOO, MICHIGAN 49007
(Address of principal executive offices) (Zip Code)
FIRST OF AMERICA BANK, N.A.
100 S. WORTH
BIRMINGHAM, MICHIGAN 48009
ATTN: CORPORATE TRUST DEPARTMENT (SUSAN M. NEED) (248 ) 901-2200
(Name, address and telephone number of agent for service)
----------------------------
BISSELL, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-0352410
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2345 WALKER, N.W.
GRAND RAPIDS, MICHIGAN 49544
(Address of principal executive offices) (Zip Code)
----------------------------
SUBORDINATED NOTES
(Title of the indenture securities)
==============================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT:
Comptroller of Currency, Washington, D.C.; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of Governors
of the Federal Reserve System, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the Trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the Articles of Association of the Trustee as now
in effect.
2. A copy of the Certificates of Authority of the Trustee to
commence business.
3. A copy of the authorization of the Trustee to exercise
corporate trust powers.
4. A copy of the existing By-Laws of the Trustee.
5. Not Applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act.
7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the Trustee, First of America Bank, N.A., a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Birmingham and State
of Michigan, on the 20th day of January, 1998.
FIRST OF AMERICA BANK, N.A.
BY: /s/ Susan M. Need
-----------------------------
SUSAN M. NEED
TRUST OFFICER
CORPORATE TRUST DEPARTMENT
<PAGE> 4
EXHIBIT 1
RESTATED AND AMENDED ARTICLES OF ASSOCIATION
(Restated and Amended Effective June 30, 1997)
The following Articles of Association of First of America Bank-Michigan,
National Association, Grand Rapids, Michigan, are hereby amended and restated
in their entirety as follows:
FIRST. The Title of this Association shall be First of America Bank,
National Association.
SECOND. The Main Office of the Association shall be in the City of
Kalamazoo, County of Kalamazoo, and State of Michigan. The general business of
the Association shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number to be fixed
and determined from time to time by resolution of a majority of the full Board
of Directors or by resolution of the shareholders at any annual or special
meeting thereof. Each Director, during the full term of his or her
directorship, shall own either such shares of the capital stock of the
Association or of any company which has control of the Association as required
by applicable laws, regulations or rulings. Unless otherwise provided by the
laws of the United States, any vacancy in the Board of Directors for any
reason, including an increase in the number thereof, may be filled by action of
the Board of Directors. A majority of the Board of Directors shall be
necessary to constitute a quorum for the transaction of business at any
Directors' meeting.
FOURTH. There shall be an annual meeting of the shareholders, the purpose
of which shall be the election of Directors and the transaction of whatever
other business may be brought before said meeting. It shall be held at the
main office or other convenient place as the Board of Directors may designate,
on the day of each year specified therefore in the Bylaws, but if no election
is held on that day, it may be held on any subsequent day according to such
lawful rules as may be prescribed by the Board of Directors.
FIFTH. The authorized amount of capital stock of this Association shall
be 48,024,785 shares of common stock of the par value of Five ($5.00) Dollars
each; but said capital stock may be increased or decreased from time to time,
in accordance with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association
shall have any preemptive or preferential right of subscription to any shares
of any class of stock of the Association whether now or hereafter authorized,
or to any obligations convertible into stock of the Association, issued or
sold, nor any right of subscription to any thereof other than such, if any, as
the Board of Directors, in its discretion, may from time to time determine and
at such price as the Board of Directors may from time to time fix.
<PAGE> 5
The Association, at any time and from time to time, by resolution duly
adopted by its Board of Directors, may authorize and issue debt obligations of
any kind whether or not Subordinated to other liabilities of the Association,
without the approval of the shareholders.
SIXTH. The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairperson of the Board, unless the Board
appoints another director to be the Chairperson. The Board of Directors shall
have the power to appoint one or more Vice Presidents; and to appoint a Cashier
and such other officers and employees as may be required to transact the
business of this Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all Bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Kalamazoo without the approval of the shareholders upon notification to the
Comptroller of the Currency, where relocation is to an already approved branch
or with approval of the Comptroller of the Currency for any other relocation;
and shall have the power to establish or change the location of any branch or
branches of the Association to any other location, without the approval of the
shareholders, but subject to the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholder
owning, in the aggregate, not less than Ten Percent of the stock of this
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten days prior
to the date of such meeting to each shareholder of record at his or her address
as shown upon the books of this Association.
TENTH. No director of the Association shall be personally liable to the
Association or its shareholders for monetary damages for breach of the
director's fiduciary duty; provided that this Article Ten shall not eliminate
or limit the liability of a director for any breach of the director's duty of
loyalty to the Association or its shareholders or for any act or omission for
which the elimination or limitation of liability is not permitted by the
National Bank Act or the rules and regulations promulgated by the Comptroller
of the Currency or other applicable bank regulatory agency or is not permitted
by the Business Corporation Act of the State of Michigan with respect to
directors of business corporations organized under the laws of that State. No
2
<PAGE> 6
amendment, alteration, modification or repeal of this Article Ten shall have
any effect on the liability of any director of the Association with respect to
any act or omission of such director occurring prior to such amendment,
alteration, modification or repeal.
The Association may indemnify any person, his/her heirs, executors or
administrators who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative by reason of the fact that such
person is or was a director, officer, employee or agent of the Association, or
is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust of
other enterprise, against expenses (including attorneys' fees), and (except as
to an action or suit by or in the right of the Association) judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her
in connection with such action, suit or proceeding to the maximum extent now or
hereafter permitted from time to time by the law of the State of Michigan
applicable to Michigan business corporations, either at the time of the act or
omission to be indemnified against or at the time of fully carrying out such
indemnification, whichever is broader. Expenses incurred in defending any such
civil or criminal action, suit or proceeding may be paid by the Association in
advance of final disposition of any such matter subject to an undertaking by or
on behalf of the director, officer, employee or agent, to repay such amount
unless it shall ultimately be determined that he or she is entitled to be
indemnified by the Association or by its indemnification insurance carrier;
provided that there shall not be allowed hereunder indemnification against
expenses, penalties or other payments incurred under an administrative
proceeding or action instituted by an appropriate bank regulatory agency which
proceeding or action results in a final order assessing civil money penalties
in requiring affirmative action by an individual or individuals in the form of
payments to the Association.
The Association may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Association,
or is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against such liability asserted against such person and
incurred by such person in any such capacity or arising out of his or her
status as such, irrespective of whether or not the Association would have the
power to indemnify against such liabilities under the law of the State of
Michigan applicable to Michigan business corporations; provided that such
insurance shall not include coverage for a formal order assessing civil money
penalties against a director or employee of the Association.
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
3
<PAGE> 7
EXHIBIT 2
COMPTROLLER OF THE CURRENCY
[LOGO]
TREASURY DEPARTMENT OF THE UNITED STATES
WASHINGTON, D.C.
WHEREAS, satisfactory evidence has been presented to the Comptroller
of the Currency that First of America Bank-Michigan, National Association
located in Grand Rapids State of Michigan has complied with all
provisions of the statutes of the United States required to be complied with
before being authorized to commence the business of banking as a National
Banking Association.
NOW, THEREFORE,I hereby certify that the above-named association is
authorized to commence the business of banking as a National Banking
Association.
IN TESTIMONY WHEREOF, witness my signature and seal of
office this 31st day of March 1995
Thomas M. Fitzgerald
Thomas M. Fitzgerald
Acting Deputy Comptroller of the Treasury
Charter No. 191
<PAGE> 8
EXHIBIT 3
[COMPTROLLER OF THE CURRENCY LOGO]
- -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- -------------------------------------------------------------------------------
Washington, D.C., 20219
COMPTROLLER OF THE CURRENCY
TREASURY DEPARTMENT OF THE UNITED STATES
WASHINGTON, D.C.
WHEREAS, First of America Bank, National Association, Kalamazoo,
Michigan, located in Kalamazoo, Michigan, being a national banking association,
organized under the statutes of the United States, has made application for
authority to act as fiduciary;
AND WHEREAS, applicable provisions of the statutes of the United States
authorize the grant of such authority;
NOW THEREFORE, I hereby certify that the above-named association is
authorized to act in all fiduciary capacities permitted by such statutes,
effective June 30, 1997.
IN TESTIMONY WHEREOF, witness my signature and seal of Office this 30th
day of June, 1997.
David J. Rogers
David J. Rogers
National Bank Examiner
Central District
Charter No. 191
<PAGE> 9
EXHIBIT 4
BY-LAWS
OF
FIRST OF AMERICA BANK, NATIONAL ASSOCIATION
(AS AMENDED AND RESTATED THROUGH JULY 16, 1997)
ARTICLE I
Meetings of Shareholders
Section 1.1 Annual Meeting and Notice. The regular annual meeting of the
shareholders for the election of directors and the transaction of whatever
other business may properly come before the meeting, shall be held at the Main
Office of the Association, 108 E. Michigan Avenue, Kalamazoo, Michigan, or such
other place as the Board of Directors may designate on the third Wednesday of
April of each year, at such time as is fixed by the Board of Directors. Notice
of such meeting shall be mailed, postage prepaid, at least ten (10) days and no
more than sixty (60) days prior to the date thereof, addressed to each
shareholder at the address for such shareholder appearing on the stock transfer
books of the Association. If, from any cause, an election of directors is not
made on the said day, the Board of Directors shall order the election to be
held on some subsequent day within sixty (60) days of the date fixed herein,
according to the provisions of law; and notice thereof shall be given in the
manner herein provided for the annual meeting.
Section 1.2. Special Meetings and Notice. Except as otherwise
specifically provided by statute, special meetings of the shareholders may be
called for any purpose at any time by the Chief Executive Officer, Board of
Directors or by any one or more shareholders owning, in the aggregate, not less
than ten percent (10%) of the stock of the Association. Written notice stating
the purpose of every such special meeting, unless otherwise provided by law,
shall be mailed, postage prepaid, not less than ten (10) days nor more than
sixty (60) days prior to the date fixed for such meeting, to each shareholder
at the address for such shareholder appearing on the stock transfer books of
the Association.
Section 1.3. Nominations for Director. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any shareholder
of any outstanding class of capital stock of the Association entitled to vote
for the election of directors. Nominations, other than those made by
management of the Association, shall be made in writing and shall be delivered
or mailed to the Chief Executive Officer of the Association and to the
Comptroller of the Currency not less than fourteen (14) nor more than fifty
(50) days prior to any meeting of shareholders called for the election of
directors. Nominations not made in accordance herewith may be disregarded by
the Chairperson of the meeting and, upon the Chairperson's instructions, the
vote tellers may disregard all votes cast for each such nominee.
<PAGE> 10
Section 1.4. Record Date for Determination of Shareholders. Except as
otherwise provided by statute, the Articles of Association or these By-Laws,
the Board of Directors may fix, in advance, a date, not more than sixty (60)
days nor less than ten (10) days preceding the date of any meeting of
shareholders, any dividend payment date or any date for allotment of rights, as
a record date for the determination of shareholders entitled to notice of, and
to vote at such meeting, or to receive such dividend or allotment as the case
may be, and only those shareholders who are shareholders of record on such date
shall be entitled to notice of or to vote at such meeting or to receive such
dividend or allotment as the case may be. The record date for determining
shareholders entitled to demand a special meeting is the date the first
shareholder signs a demand for the meeting describing the purpose for which it
is to be held.
Section 1.5. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting.
Proxies shall be dated and shall be filed with the records of the meeting.
Section 1.6. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association or by these
By-Laws.
Section 1.7. Number of Votes. In deciding on questions at meetings of
shareholders, except in the election of directors, each shareholder shall be
entitled to one vote for each share of stock held.
Section 1.8. Presiding Officers for Shareholders Meetings. The
Chairperson, or another designated director shall preside at all regular and
special meetings of shareholders, and the Secretary to the Board of Directors
or the Cashier shall act as secretary of all such meetings.
Section 1.9 Action by Unanimous Written Consent. Any action required to
be taken at a meeting of the shareholders, or any action that may be taken at a
meeting of the shareholders, may be taken without a meeting if, before the
action, a consent in writing, setting forth the action to be taken, is signed
by all of the shareholders entitled to vote with respect to the subject matter
of the action, and the written consent is filed with the minutes of the
proceedings of the shareholders. This consent has the same effect as a
unanimous vote of shareholders, and may be stated as such in any document.
ARTICLE II
Directors
Section 2.1. Board of Directors. The Board of Directors (hereinafter
referred to as the "Board") shall have power to manage and administer the
business and affairs of the
<PAGE> 11
Association. Except as expressly limited by law, all corporate powers of the
Association shall be vested in and may be exercised by the Board.
Section 2.2. Number, Term and Qualifications.
(a) The Board shall consist of not less than five (5) nor more than
twenty-five (25) persons, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution
of a majority of the full Board or by resolution of the shareholders at
any meeting thereof; provided, however, that a majority of the full Board
may not increase the number of directors to a number which; (i) exceeds
by more than two (2) the number of directors last elected by shareholders
where such number was fifteen (15) or less; and (ii) to a number which
exceeds by more than four (4) the number of directors last elected by
shareholders where such number was sixteen (16) or more, but in no event
shall the number of directors exceed twenty-five (25). A director shall
hold office until a successor is elected and qualified, or until the
director resigns, or until the end of the month any director attains the
age of sixty-five (65) years, at which time the qualification of the
director to serve shall cease, and such directorship shall be deemed
vacated. Thereafter, such person shall not be eligible for election or
appointment to the Board.
(b) In managing the business and affairs of the Bank, the Board of
Directors oversees the Bank's practices and conditions to assure that it
engages in safe and sound practices and that it remains in a safe and
sound condition and that it operates in accordance with applicable laws
and regulations all in order to maintain public confidence and protect
the public interest and the interest of depositors, creditors and
shareholders. Therefore, in addition to the foregoing age qualification,
in order for any nominee to be eligible to be elected to or serve on the
Board of Directors, the nominee must have a history of conducting his or
her own personal and business affairs in a safe and sound manner, in a
safe and sound condition, in accordance with applicable laws and
regulations, and without substantial conflicts of interests. Prior to
his or her first nomination and every third year thereafter, each
potential director nominee shall complete under oath a director
qualification, eligibility and disclosure questionnaire, as shall be
approved by the Board of Directors (hereafter "Director Qualification,
Eligibility and Disclosure Questionnaire"), which Director Qualification,
Eligibility and Disclosure Questionnaire shall be reviewed by the
Nominating and Compensation Committee of the Board of Directors of First
of America Bank Corporation (the "Corporation") to determine whether each
such nominee is eligible to serve pursuant to the foregoing criteria.
For years between the years in which an incumbent director's nomination
requires completion of the Director Qualification, Eligibility and
Disclosure Questionnaire, the incumbent director shall certify in writing
that there has been no change in the information furnished in the last
completed Questionnaire that would materially adversely affect the
director's qualifications or eligibility to serve. All determinations as
to eligibility to serve made by the Nominating and Compensation Committee
of the Corporation shall be binding and conclusive.
3
<PAGE> 12
Section 2.3. Organization Meeting. The Secretary of the Board or the
Cashier, upon receiving the result of any election, shall notify the
directors-elect of their election and of the time and place at which they are
required to meet for the purpose of taking the oath, organizing the new Board
and electing and appointing officers of the Association for the succeeding
year. Such meeting shall be appointed to be held on the day of the election,
or as soon thereafter as practicable, and, in any event, within thirty (30)
days thereof. If, at the time fixed for such meeting, there shall not be a
quorum present, the directors present may adjourn the meeting, from time to
time, until a quorum is obtained.
Section 2.4. Regular Meetings. The regular meetings of the Board shall be
held monthly, without notice, on a date and at a time designated by the Board,
at the Main Office, or any other convenient place authorized by the Board.
When any meeting of the Board falls upon a holiday, the meeting shall be held
on the next banking business day, unless the Board shall designate some other
day.
Section 2.5. Special Meetings. Special meetings of the Board of Directors
may be called by the Chief Executive Officer of the Association, or at the
request of three (3) or more directors or one or more shareholders owning in
the aggregate not less than ten percent (10%) of the stock of the Association.
Each person or persons authorized to call special meetings of the Board may fix
the time and place for holding any special meeting of the Board so called.
Except as otherwise provided by law or the Articles of Association, each member
of the Board of Directors shall be given notice as hereafter provided.
Section 2.6. Notice. Notice of any special Board meeting shall be given at
least two (2) days prior thereto stating the date, time and place of the
meeting. Notice of the special meeting may be given by telephone, telex,
telegram, letter, or in person, to the last known business address or residence
of each director. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage prepaid. If
telephoned, such notice shall be deemed delivered if a message stating the
substance of the notice is communicated directly to the director, or left with
his or her business office or residence. If notice be given by telex or
telegram, such notice shall be deemed to be delivered when the telex or
telegram is sent or delivered to the telegraph company, as the case may be.
Any director may waive notice, in writing, of any meeting, either before or
after said meeting if the director had actual notice of the meeting. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except when a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened. When time is of the essence, a majority of the
members of the Board attending a conference telephone special meeting may waive
the two (2) day prior notice requirement.
Section 2.7. Meetings by Conference Telephone. Members of the Board may
participate in any meeting by means of conference telephone or similar
communications equipment, so long as all persons participating in the meeting
can hear each other. Participation in such a meeting constitutes presence in
person at the meeting and any action that may be taken by the Board at a
special meeting may be taken by a conference call meeting. Minutes of all
4
<PAGE> 13
telephone meetings shall be kept and presented at the next regular meeting of
the Board of Directors.
Section 2.8. Action Without A Meeting. Any action that may be taken by
the Board or a Committee thereof at a meeting may be taken without a meeting,
without prior notice and without a vote if, before or after the action, all
members of the Board or Committee consent thereto in writing.
Section 2.9. Quorum. A majority of the members of the Board then in
office shall constitute a quorum at any meeting, except when otherwise provided
by law; but a lesser number may adjourn any meeting, from time to time, and the
meeting may be held, as adjourned, without further notice. The vote of a
majority of the members present at a meeting at which a quorum is present shall
constitute the action of the Board unless otherwise provided by law or by the
Articles of Association.
Section 2.10. Vacancies. When any vacancy occurs among the directors,
the remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.
Section 2.11. Removal of Directors. Except as otherwise provided by
law, a director or the entire board may be removed, with or without cause, by
vote of the holders of a majority of the shares entitled to vote at an election
of directors.
Section 2.12. Fees. Each member of the Board, excepting officers and
employees of the Association or its affiliates receiving salaries, shall
receive an annual retainer, if any, a fee for each Board meeting attended and a
fee for each meeting attended of a Committee of the Board of which the director
is a member with the amounts of such fees to be fixed from time to time by the
Board.
ARTICLE III
Committees of the Board
Section 3.1. Audit Committee. There shall be an Audit Committee composed
of not less than three directors, who are not employees of the Association and
who are, in the opinion of the Board of Directors, free from any relationships
that would interfere with the exercise of independent judgment as a member of
the Audit Committee, appointed by the Board annually, or more often, whose
duties shall be to make or cause to be made suitable audit examinations of the
Association and any department thereof and to report the results of such
examinations to the Board. Such reports and all regulatory examinations shall
be reviewed to ascertain that effective accounting and internal controls and
procedures are being maintained.
Section 3.2. PUBLIC POLICY COMMITTEE. There shall be a Public Policy
Committee composed of the number of directors as the Board of Directors shall
determine from time to
5
<PAGE> 14
time, appointed by the Board annually, or more after, whose duties shall be
oversee the policies and programs of the Association which reflect on the
Association's involvement and image in the communities served, including, but
not limited to, Community Reinvestment Act and Fair Lending compliance.
Section 3.3. Other Committees. The Board of Directors may appoint other
committees, composed of such number of directors and endowed with such powers
and charged with such duties as the Board by resolution may prescribe;
including, but not limited to, committees which have specific responsibilities
with respect to any regional division of this Association which the Board of
Directors by resolution may designate.
Section 3.4. Notice, Conference Telephone Meetings and Minutes. Notice of
committee meetings and participation in committee meetings by means of
conference telephone or similar equipment shall be as provided herein for
meetings of the Board of Directors, except the Audit Committee shall not hold
meetings by means of conference telephone or similar equipment. Each committee
shall keep minutes of its meetings, and such minutes shall be submitted at the
next regular meeting of the Board of Directors, and any action taken by the
Board with respect thereto shall be entered into the minutes of the Board.
Section 3.5. Quorum. Except as otherwise expressly provided by law or
these By-Laws, a majority of the members then in office of a Committee shall
constitute a quorum, and the vote of a majority of the members present at a
meeting of any Committee at which a quorum is present shall constitute the
action of the Committee. A majority of the members of a Committee present may
appoint one or more members of the Board to act at the meeting in the place of
any absent member or members of the committee and such appointed member or
members shall be counted in determining whether a quorum is present.
ARTICLE IV
Officers and Employees
Section 4.1. Chairperson of the Board. The Board may appoint one of its
members to be Chairperson of the Board to serve at the pleasure of the Board.
The Chairperson of the Board shall preside at meetings of the Board of
Directors and shareholders and, if so designated in the resolution of
appointment, the Chairperson of the Board shall serve as the Chief Executive
Officer of the Association and shall supervise the carrying out of the policies
adopted or approved by the Board, and shall have general executive powers as
well as the specific powers and duties as from time to time may be conferred
upon, or assigned to him or her by the Board.
Section 4.2. President. The Board shall appoint one of its members, who
may be the same person as the Chairperson, to be President of the Association
to serve at the pleasure of the Board. In the absence of the Chairperson, or
if the Board shall not have appointed a Chairperson, the President shall
preside at any meeting of the Board or shareholders. The President shall have
general executive powers and, unless a Chairperson of the Board has been
designated by resolution of the Board as Chief Executive Officer or in the
absence of a
6
<PAGE> 15
Chairperson so designated, the President shall serve as Chief Executive Officer
of the Association. The President shall have and may exercise any and all
other powers and duties pertaining by law, regulation, or practice, to the
office of President, or imposed by these By-Laws. The President shall also
have and may exercise such further powers and duties as from time to time may
be conferred upon, or assigned to, him or her by the Board.
Section 4.3. Vice Presidents. The Board may appoint one or more Executive
Vice Presidents, Senior Vice Presidents and Vice Presidents. Each vice
president shall have such powers and duties as may be assigned to him or her by
the Board or the Chief Executive Officer. One vice president shall be
designated by the Board as the acting Chief Executive Officer, in the absence
of the Chief Executive Officer and the President, to perform all the duties of
the Chief Executive Officer.
Section 4.4. Cashier and Secretary. The Board shall appoint a Cashier and
a Secretary or other designated officer who shall be secretary of the Board and
of the Association, who may or may not be the Cashier, and shall keep accurate
minutes of all meetings. The Secretary shall attend to the giving of all
notices required by these By-Laws to be given; shall be custodian of the
corporate seal, records, documents and papers of the Association; shall provide
for the keeping of proper records of all transactions of the Association;
shall have and may exercise any and all other powers and duties pertaining by
law, regulation or practice, to the office of Secretary, or imposed by these
By-Laws; shall also perform such other duties as may be assigned, from time to
time, by the Board and the Chief Executive Officer.
Section 4.5. Other Officers. The Board may appoint one or more Assistant
Vice Presidents, one or more trust officers, one or more assistant trust
officers, one or more Assistant Cashiers and assistant Secretaries, one or more
Managers or Assistant Managers and such other officers and attorneys in fact as
from time to time may appear to the Board to be required or desirable to
transact the business of the Association. Such officers shall respectively
exercise such powers and perform such duties as pertain to their several
offices, or as may be conferred upon, or assigned to, them by the Board, or by
the Chief Executive Officer of the Association.
Section 4.6. Tenure of Office. The Chief Executive Officer and all other
officers shall hold office for the current year for which the Board was
elected, unless they shall resign, become disqualified, or be removed. The
Chief Executive Officer, or any other officer of the Bank authorized by the
Chief Executive Officer, may appoint and dismiss all or any officers, employees
and agents at will, and prescribe their duties and the conditions of their
employment, and from time to time fix their compensation subject to any other
authorization or direction by the Board. Any vacancy occurring in the Offices
of the Chief Executive Officer, President or Cashier shall be filled promptly
by the Board of Directors.
Section 4.7 Trust Officer. There shall be a Trust Officer or other Officer
of the Association designated by the Board whose duty it shall be to manage,
supervise and direct all of the activities of the Trust Department. He or she
shall do or cause to be done all things necessary or proper in carrying on the
business of the Trust Department in accordance with provisions of law and
regulations. He or she shall act pursuant to opinion of counsel where such
7
<PAGE> 16
opinion is deemed necessary. Opinions of counsel shall be retained on file in
connection with all important matters pertaining to fiduciary activities. Such
Officers shall be responsible for all assets and documents held by the
Association in connection with fiduciary matters.
ARTICLE V
Stock and Stock Certificates
Section 5.1. Transfers. Shares of stock shall be transferable on the
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall, in proportion to the shares owned, succeed to all rights
and liabilities of the prior holder of such shares.
Section 5.2. Stock Certificates. Certificates of stock shall bear the
signature of the Chairperson or the President (which may be engraved, printed
or impressed), and shall be signed manually or by facsimile process by the
Secretary, assistant Secretary, Cashier, assistant Cashier, or any other
officer appointed by the Board of Directors for that purpose, to be known as
Authorized Officer, and the seal of the Association shall be engraved thereon.
Each certificate shall recite on its face that the stock represented thereby is
transferable only upon the books of the Association and upon surrender of the
current certificate properly endorsed.
ARTICLE VI
Corporate Seal
Any officer shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form:
ARTICLE VII
Miscellaneous Provisions
Section 7.1. Fiscal Year. The fiscal year of the Association shall be
the calendar year.
Section 7.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions,
8
<PAGE> 17
settlements, petitions, schedules, accounts, affidavits, bonds, undertakings,
proxies and other instruments or documents may be signed, executed,
acknowledged, verified, delivered or accepted on behalf of the Association by
the Chairperson of the Board, or the President, or any Vice-President, or the
Secretary, or the Cashier, or, if in connection with the exercise of fiduciary
powers of the Association, by any of said officers or by any Trust Officer.
Any such instruments may also be executed, acknowledged, verified, delivered or
accepted on behalf of the Association in such other manner and by such other
officers as the Board of Directors may from time to time direct. The
provisions of this Section 7.2 are supplementary to any other provisions of
these By-Laws.
Section 7.3. Records. The Articles of Association, the By-Laws and the
proceedings of all meetings of the shareholders, the Board, and standing
committees of the Board, shall be recorded in appropriate minute books provided
for that purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier or other person appointed to act as secretary of the
meeting.
Section 7.4 Regional Divisions. For the efficient management of the
business and activities of the Association, the Board of Directors of the
Association may designate and establish one or more regional divisions of the
Association for the purposes and functions set forth by the Board. The Board
of Directors of the Association may designate or authorize the Chief Executive
Officer to designate a person to be president of any regional division of the
Association, an advisory board of directors for any regional division of the
Association and its members, and such other officers of any such regional
division, provided that the appointment or election of any person as president
or other officer of a regional division of the Association shall not constitute
the appointment or election of that person as an officer of the Association,
nor shall such appointment or election give any person any right to remain in
the employ of the Association or any subsidiary thereof. A person designated
as an officer of a regional division shall have such authority,
responsibilities and duties as are assigned by the Board of Directors, the
Chief Executive Officer of the Association or the president of such regional
division. The president of any regional division shall report to the Chief
Executive Officer of the Association or his or her designee. The Board of
Directors of the Association may at any time dissolve or discontinue any
regional division and amend and rescind any assignments or designations made
with respect to any regional division. On dissolution or discontinuance of a
regional division, all assignments or designations shall terminate and the
Association shall function thereafter as if the regional division has never
been established.
ARTICLE VIII
Emergency Operations by Surviving Staff
Section 8.1. Emergencies. In the event of a major disaster as herein
defined, then, and to the end of that, operations of the Association may be
continued, the business and affairs of the Association may be conducted under
the special powers of this Section 8.1, Article VIII. A major disaster means
an emergency condition which makes it impractical to conduct the business and
affairs of the Association in the normal way, either because of the sudden
death,
9
<PAGE> 18
disablement or immobilization of many of its Directors or principal officers,
or because some or all of its normal places of business become unusable or
inaccessible; it includes emergencies caused by war or acts of war, civil
defense regulations, riot or civil commotion, tornado, fire, flood, pestilence
or other act of God, or any other similar cause.
Section 8.2. Officers Pro Tempore.
(a) The Board shall have the power in the absence or disability of
any officer, or upon the refusal of any officer to act, to delegate and
prescribe such officer's powers and duties to any other officer, or to
any director, for the time being.
(b) In the event of a major disaster which prevents the conduct and
management of the affairs and business of the Association by its
directors and any of its officers as contemplated by these By-Laws, any
three or more available directors shall constitute a quorum for the full
conduct and management of the affairs and business of the Association in
accordance with the provisions of these By-Laws. This Article VIII shall
be subject to implementation by resolutions of the Board passed from time
to time for that purpose, and any provisions of these By-Laws (other than
this section) and any resolutions which are contrary to the provisions of
this Section or to the provisions of any such implementary resolutions
shall be suspended until it shall be determined by the directors acting
under this section that it shall be to the advantage of the Bank to
resume the conduct and management of its affairs and business under all
of the other provisions of these By-Laws.
Section 8.3. Management Succession. In the event of a major disaster, if
the Chief Executive Officer of this Association cannot be located or is unable
to assume or to continue normal executive duties, then the authority and duties
of the Chief Executive Officer shall be assumed by the President or, if the
President is the Chief Executive Officer or also is not available, by the Vice
President designated to assume the duties of Chief Executive Officer, in the
absence of the Chief Executive Officer and the President, and if the designated
Vice President also is not available, then by an individual appointed by oral
or written direction, given in person or by telephone, or telegram, or other
writing, by any three or more available directors.
The person, who in accordance with this resolution, assumes the authority
and duties of the Chief Executive Officer of the Association shall continue to
serve until the duly designated Chief Executive Officer shall become available
to perform the duties of the Chief Executive Officer of the Association.
If as a consequence of war or war-like damage or disaster, the Cashier of
the Association cannot be located by the then acting Chief Executive Officer,
or is unable to assume or to continue normal duties, then the authority and
duties of the Cashier shall be assumed by an individual selected by the Board
of Directors or three or more available directors acting under Section 8.2.
10
<PAGE> 19
The person, who in accordance with this resolution, assumes the authority
and duties of the Cashier, shall continue to serve until the elected Cashier of
the Association shall become available to perform the duties of this office.
Section 8.4. Provision for Acting Main Office. If, by reason of any
major disaster, the Main Office of the Association is unable to continue its
function, then such other office of the Association as the Directors of the
Association may from time to time specify by resolution shall become the
"Acting Main Office" of the Association and the functions ordinarily carried
on at the Main Office shall be transferred to such Acting Main Office. If any
other authorized place of business of the Association is unable to function
during any major disaster, the business ordinarily conducted at such location
shall be temporarily relocated in such other place as may be designated by the
Board of Directors or by three or more available directors.
ARTICLE IX
By-Laws
Section 9.1. Inspection. A copy of the By-Laws, with all amendments
thereto, shall at all times be kept in a convenient place at the Main Office
of the Association, and shall be open for inspection to all shareholders,
during banking hours.
Section 9.2. Amendments. The By-Laws may be amended, altered or repealed,
at any regular or special meeting of the Board, by vote of a majority of the
whole number of Directors or by vote of a majority of the shares entitled to
vote at any regular or special meeting of shareholders.
ARTICLE X
Indemnification
Section 10.1. Indemnification of Directors, Officers and Employees. The
Association may indemnify any director, officer, employee or agent of the
Association to the extent permitted by law and the Association's Articles of
Association.
11
<PAGE> 20
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Bissell, Inc. and
First of America Bank, N.A., the undersigned, in accordance with Section 321(b)
of the Trust Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or State
Authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request
therefor.
FIRST OF AMERICA BANK, N.A.
By: /s/ Susan M. Need
------------------------------
Susan M. Need
Trust Officer
Dated: January 20, 1998 Corporate Trust Department
<PAGE> 21
EXHIBIT 7
A copy of the latest report of condition of the Trustee published pursuant
to law or the requirements of its supervising or examining authority.
<PAGE> 22
Call Date: 9/30/97 ST-BK: 26-2240 PFIDC 022
Page RC-1
Legal Title of Bank: FIRST OF AMERICA BANK, N.A.
Address: 108 EAST MICHIGAN AVE
City, State Zip: KALAMAZOO, MI 49007
FDIC Certificate No.: /9/3/9/2/9/
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR SEPTEMBER 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C300
----------------------------
DOLLAR AMOUNTS IN THOUSANDS RCON Bil Mil thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS //////////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): //////////////////////
a. Noninterest-bearing balances and currency and coin(1)...................................... 0081 669,220 1.a.
b. Interest-bearing balances(2)............................................................... 0071 0 1.b.
2. Securities: /////////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A)................................. 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............................... 1772 3,895, 622 2.b.
3. Federal funds sold and securities purchased under agreements to resell......................... 1350 474,612 3.
4. Loans and lease financing receivables: //////////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C) RCON 2122 9,270,015 ////////////////////// 4.a.
b. LESS: Allowance for loan and lease losses.................. RCON 3123 162,918 ////////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ..................... RCON 3128 0 ////////////////////// 4.c.
d. Loans and leases, net of unearned income, //////////////////////
allowance, and reserve (item 4.a, minus 4.b and 4.c)....................................... 2125 9,107,097 4.d.
5. Trading assets (from Schedule RC-D)............................................................ 3545 0 5.
6. Premises and fixed assets (including capitalized leases)....................................... 2145 173,696 6.
7. Other real estate owned (from Schedule RC-M)................................................... 2150 9,081 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-N)....... 2130 22,078 8.
9. Customers' liability to this bank on acceptances outstanding................................... 2155 958 9.
10. Intangible assets (from Schedule RC-M)......................................................... 2143 63,554 10.
11. Other assets (from Schedule RC-J).............................................................. 2150 424,844 11.
12. Total assets (sum of items 1 through 11)....................................................... 2179 14,840,802 12.
----------------------
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 23
<TABLE>
<S><C>
Legal Title of Bank: FIRST OF AMERICA BANK, N.A. Call Date: 9/30/97 ST-BK: 26-2340 FFIEC 032
Address: 100 EAST MICHIGAN AVE Page RC-2
City, State Zip: KALAMAZOO, MI 49007
FDIC Certificate No.: 03029
Schedule RC -- Continued
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES /////////////////
13. Deposits: /////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E).................. 2200 11,023,967 11.a.
(1) Noninterest-bearing (1)......................................... RCON 6631 1,956,484 ///////////////// 13.a.(1)
(2) Interest-bearing................................................ RCON 6636 9,067,483 ///////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs.............................. /////////////////
(1) Noninterest-bearing................................................................... /////////////////
(2) Interest-bearing...................................................................... /////////////////
14. Federal funds purchased and securities sold under agreements to repurchase..................... 2800 628,614 14.
15. a. Demand notes issued to the U.S. Treasury................................................... 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)................................................... 3548 0 15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): /////////////////
a. With a remaining maturity of one year or less.............................................. 2332 1,216,554 16.a.
b. With a remaining maturity of more than one year through three years........................ A547 625,849 16.b.
c. With a remaining maturity of more than three years......................................... A548 78 16.c.
17. Not applicable /////////////////
18. Bank's liability on acceptances executed and outstanding....................................... 2920 958 18.
19. Subordinated notes and debentures (2).......................................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)......................................................... 2930 118,306 20.
21. Total liabilities (sum of items 13 through 20)................................................. 2948 13,614,326 21.
22. Not applicable /////////////////
EQUITY CAPITAL /////////////////
23. Perpetual preferred stock and related surplus.................................................. 3838 0 23.
24. Common stock................................................................................... 3230 198,617 24.
25. Surplus (exclude all surplus related to preferred stock)....................................... 3839 461,805 25.
26. a. Undivided profits and capital reserves..................................................... 3632 543,529 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities..................... 3434 22,525 26.b.
27. Cumulative foreign currency translation adjustments............................................ /////////////////
28. Total equity capital (sum of items 23 through 27).............................................. 3210 1,226,476 28.
29. Total liabilities and equity capital (sum of items 21 and 28).................................. 3300 14,840,802 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1 - Indicate in the box at the right the number of the
statement below that best describes the most
comprehensive level of auditing work performed Number
for the bank by independent external auditors -----------------
as of any date during 1996........................ | RCON 6724 | N/A | M.I.
------------------
1 - Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 - Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 - Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 - Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 - Review of the bank's financial statements by external auditors
6 - Compilation of the bank's financial statements by external auditors
7 - Other audit procedures (excluding tax preparation work)
8 - No external audit work
- --------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 1
Exhibit T3E
Preliminary Draft 1/16/98
BISSELL INC.
REDEMPTION OFFER MEMORANDUM
THE OFFER EXPIRES ON MARCH 31, 1998, AT 5 P.M. E.S.T. UNLESS EXTENDED.
_______________________________________________________
THE NOTES OFFERED UNDER THIS MEMORANDUM HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND (A)
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (2) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND ANY FOREIGN JURISDICTION AND (B) THE HOLDER,
AND EACH SUBSEQUENT HOLDER, IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE
NOTES OF THE RESALE RESTRICTIONS LISTED IN (A) ABOVE.
_______________________________________________________
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER TO TENDER OR REFRAIN FROM TENDERING SHARES OF COMMON STOCK. EACH
SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SUCH SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
_______________________________________________________
OFFER TO REDEEM SHARES
On the terms and subject to the conditions set forth in this Memorandum,
BISSELL Inc. (the "Company") hereby offers (the "Offer") to redeem up to an
aggregate of [______] shares of its common stock, $1.00 par value per share,
(the "Common Stock") from shareholders (the "Offerees") at a price of $[___]
per share (the "Purchase Price"). The Purchase Price is equal to the appraised
fair market value of the Company's Common Stock as of [________], 1998 as
determined by Duff & Phelps, LLC for purposes of the BISSELL EMPLOYEE STOCK
OWNERSHIP PLAN (the "ESOP"). See "Appraised Value of Common Stock."
The Purchase Price of $[___] for each share of Common Stock sold to the
Company by the Offerees and redeemed by the Company will be paid in the form of
$[____] per share in cash and $[___] per share in face amount of Subordinated
Notes of the Company (the "Notes"), as described under the heading "The
Subordinated Notes." However, Offerees who own [250] shares or less of the
Common Stock or who are residents of Canada will be paid only in cash. Also,
the Company reserves the right to pay cash, in lieu of each Note that is equal
to or less than a minimum principal amount, not to exceed $10,000, as
determined by the Company upon completion of the Offer.
The Offer is limited to Offerees who are the holders of the Common Stock
according to the Company's records on January 15, 1998 (the "Record Date"), but
excluding the ESOP from which the Company will be simultaneously redeeming an
aggregate of [____] shares at the Purchase Price for all
<PAGE> 2
cash and certain members of the John M. Bissell Family who have agreed not to
participate in the Offer as to all or substantially all of their shares of
Common Stock. See "Excluded Shareholders."
The Offer is designed to achieve several objectives. First, the Offer
provides an opportunity for those shareholders who seek liquidity to sell a
significant portion of their stock. Second, the Offer is designed to increase
the potential availability of capital gain treatment. See "Federal Income Tax
Consequences."
IMPORTANT FACTORS TO BE CONSIDERED BY OFFEREES
In connection with their assessment of the Offer, the Company wishes to
call the attention of Offerees to a number of important factors. First, the
$[___] value per share of Common Stock was determined by Duff & Phelps, LLC ("D
& P") with reference to shares owned by the ESOP. Because participants in the
ESOP have the right to require that their shares be repurchased, D & P did not
apply any discount for lack of marketability in arriving at such per share
value. In general, a significant discount for lack of marketability would be
applied in the appraisal of shares of a closely held company representing less
than control. Consequently, the Company believes that the Offer at $[___] per
share is in excess of the fair market value of the shares of Common Stock owned
by Offerees but the Company has not attempted to determine the appropriate
discount for lack of marketability or resulting fair market value of shares of
Common Stock owned by Offerees. A countervailing factor is the interest rate on
the Notes. Such interest rate is less than what a market rate of interest would
be on an obligation selling at face value in the market place with terms and
conditions similar to the Notes. Consequently, the fair market value of a Note
at the time of issuance will be less than its face amount but the Company has
not attempted to determine the amount of discount that would apply in valuing
the Notes. Finally, if the Company's future performance is favorable, as the
Company's management projects it will be, future earnings, less the interest
costs incurred in connection with the Offer and simultaneous purchase of shares
from the ESOP, pro rated over the reduced number of shares of Common Stock
outstanding after completion of such transactions, should provide greater
earnings per share of Common Stock to continuing holders than would have
applied absent the Offer and simultaneous purchase from the ESOP. However,
there is no assurance that the Company will meet its future projections and the
debt incurred in connection with the Offer and simultaneous purchase of shares
from the ESOP will place the Company in a more leveraged and riskier position.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER TO TENDER OR REFRAIN FROM TENDERING SHARES OF COMMON STOCK.
EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SUCH
SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
NUMBER OF SHARES EACH OFFEREE MAY HAVE REDEEMED PURSUANT TO OFFER
Redemption Right Certificates
The Company is distributing to each Offeree a Redemption Right Certificate
which requires the Company to redeem from the registered holder of such
Certificate a specified number of shares of Common Stock, subject to all of the
terms and conditions of the Offer as described in this Memorandum including the
Company's right to terminate the Offer and rights evidenced by the Redemption
Right Certificate. See "Termination of Offer." Each Offeree owning more than
[2,000] shares of Common
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<PAGE> 3
Stock on the Record Date has been issued a Redemption Right Certificate
covering [___]% of the shares of Common Stock owned by such Offeree on the
Record Date, rounded up to the nearest whole share. Each Offeree owning [2,000]
shares of Common Stock or less on the Record Date has been issued a Redemption
Right Certificate covering 100% of the shares of Common Stock owned by such
Offeree and in the case of any Offeree owning [250] shares or less or who is a
resident of Canada payment will be made solely in cash. See "Federal Income Tax
Consequences" for a discussion of the basis on which the number of shares
covered by the Redemption Right Certificates was determined.
Each registered holder of a Redemption Right Certificate has the right to
assign his or her Redemption Right Certificate, and the rights evidenced
thereby, in whole or in part to one or more other Offerees subject to the
following: (i) the assignee(s) must be a shareholder(s) of the Company on the
Record Date; (ii) the Offeree making the assignment and the assignee(s) must
certify to the Company that no consideration has been paid or received,
directly or indirectly, by them in connection with such assignment, and (iii)
the Redemption Right Certificate being assigned, with a properly completed
assignment form executed by the Offeree making the assignment and the
assignee(s), must be tendered to the Company at 2345 Walker, N.W., Grand
Rapids, Michigan 49544 on or before the Expiration Date for recordation of the
transfer.
Pro Rata Right of Redemption
In addition to shares which each Offeree may sell to the Company pursuant
to Redemption Right Certificate(s), each Offeree may participate in the pro
rata right to have redeemed shares of Common Stock by the Company which are
subject to all of the Redemption Right Certificates which have been distributed
by the Company but which are not duly exercised or are not exercised in full.
The right to have redeemed by the Company the number of shares covered by
Redemption Right Certificates which are not exercised or are only partially
exercised by the Expiration Date, as defined below, will be allocated pro rata
to Offerees who elect, in the manner described under "Acceptance of the Offer;
Procedure for Tendering Shares and Redemption Right Certificate," to
participate in such phase of the Offer. The pro rata allocation will be based
on the respective number of shares of Common Stock owned by all Offerees who
participate in such phase of the offering and any Offeree so participating may
specify a limit on the number of shares of Common Stock that he or she is
willing to sell pursuant thereto.
ACCEPTANCE OF THE OFFER; PROCEDURE FOR TENDERING SHARES AND REDEMPTION RIGHT
CERTIFICATES
In order for an Offeree to accept the Offer, he or she must complete and
tender to the Company on or before 5 P.M. Eastern Standard Time on March 31,
1998, subject to extension by the Company in its discretion to a date not later
than April 30, 1998 (the "Expiration Date"), the following: (i) a properly
completed and executed Redemption Offer Election and Transmittal Form
("Election Form") which accompanies this Memorandum, (ii) if appropriate, one
or more Redemption Right Certificates, and (iii) certificates for the shares of
Common Stock subject to being redeemed by the Company, all in accordance with
the instructions to the Election Form. Any Offeree wishing to have the maximum
number of shares of Common Stock redeemed should tender all of his or her
certificates for shares of Common Stock. PLEASE READ THE INSTRUCTIONS ON THE
REVERSE SIDE OF THE ELECTION FORM CAREFULLY.
The Company will pay the cash portion due an Offeree pursuant to this
Offer by check payable by the Company and the balance, if any, by delivery to
the Offeree of a Subordinated Note for the principal amount of such balance.
See "Subordinated Notes". If any tendered shares of Common Stock are not
purchased pursuant to this Offer or if less than all such shares evidenced by a
stock certificate are
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<PAGE> 4
tendered, stock certificates for any unpurchased shares of Common Stock will be
returned by the Company as promptly as practicable after the Expiration Date
without expense to the Offeree.
The method of delivery of such certificates and documents is at the
election and risk of the Offeree, and if sent by mail, it is recommended that
the certificates be delivered by registered mail, return receipt requested.
Postal insurance is available for those who wish to insure delivery of
certificates. All questions as to the validity, form and documentation of any
tender, the propriety of execution of any documents or assignment of any
certificate, allocation of redemption in the event of oversubscription, and
other questions as to the eligibility or acceptability of any certificate
including the time of receipt will be determined by the Company, whose
determination and interpretation will be final and binding on all Offerees. The
Company reserves the right to reject any and all tenders that are not in the
appropriate form or the acceptance of which would, in the opinion of Company's
counsel, be unlawful. The Company reserves the right to waive any of the
conditions of this Offer or any defect in tender with regard to any particular
certificate of any particular Offeree. Neither the Company nor any other entity
or person is under any duty to give notification of any defects or
irregularities in tenders and neither the Company nor any other entity or
person shall incur liability for failure to give any such notification. Tenders
will not be deemed to have been made until all defects and irregularities have
been cured or waived by the Company.
TERMINATION OF OFFER
THE COMPANY MAY REVOKE THE OFFER AND TERMINATE THE RIGHTS EVIDENCED BY THE
REDEMPTION RIGHT CERTIFICATES AT ANY TIME UP TO AND INCLUDING THE EXPIRATION
DATE. In the event of such termination, the Company will pay to each registered
holder of a Redemption Right Certificate an amount equal to 1/100th of one cent
per share of Common Stock covered by such Redemption Right Certificate. Such
payment will be made by the Company within 15 days of such termination. The
reservation of the right to terminate the Offer is designed to protect the
Company in the event of its failure to close on the necessary financing, a
material change in the Company's circumstances or other unforeseen events.
EXCLUDED SHAREHOLDERS
The ESOP is not included as an Offeree since simultaneously with the
redemption of shares pursuant to the Offer, the Company will redeem a minimum
of [___] shares of Common Stock from the ESOP at the Purchase Price,
aggregating $[_______], but, in accordance with legal requirements for
transactions between the Company and the ESOP, the Purchase Price for shares
purchased from the ESOP will be paid in cash. The minimum number of shares
being redeemed from the ESOP represents approximately [___]% of the [_______]
shares of Common Stock owned by the ESOP on the Record Date. In view of this
transaction and with its consent, the ESOP will not participate in the Offer
and, accordingly, it is not an Offeree. See "Funding of Offer and Simultaneous
Redemption from ESOP."
The institutions providing the financing of the cash portion of the Offer
have required that John M. Bissell, Mark J. Bissell and Matthew R. Bissell not
sell any of their shares pursuant to the Offer in order to demonstrate their
financial commitment to the Company. Accordingly, John M. Bissell, Mark J.
Bissell and Matthew R. Bissell have agreed not to participate in the Offer with
respect to all of the Common Stock which they own or control, aggregating
[____] shares, and John R. Bissell and James H. Bissell have agreed not to
participate in the Offer with respect to all but 2,300 shares, each, of the
shares of Common Stock which they own. These exclusions have the added benefit
of enhancing the opportunity for other Offerees to be entitled to capital gain
treatment. If all shareholders other than the ESOP were eligible to participate
in the Offer, the required percentage of shares that would have to be redeemed
to
4
<PAGE> 5
meet the "substantially disproportionate test" would be so large as to render
the transaction financially unfeasible. John M. Bissell, Mark J. Bissell and
Matthew R. Bissell owned or controlled an aggregate of [____] shares on the
Record Date, representing approximately [__]% of the Company's issued and
outstanding shares on such date. Such parties will own or control [___] shares
representing approximately [__]% of the then number of issued and outstanding
shares following completion of the Offer and the simultaneous redemption of
shares from the ESOP assuming that the full number of shares which the Company
is offering to redeem from Offerees are redeemed. Any Offeree who does not
participate in the Offer similarly will experience an increase in percentage
ownership.
IMPACT OF OFFER ON FUTURE DIVIDEND AND REDEMPTION POLICIES
It is anticipated that the financing arrangements pursuant to which the
Company will fund the cash portion of the transactions will restrict the
payment of dividends and distributions to redeem stock only if the Company is
in violation of its loan covenants. Consequently, the Company's ability to
continue to pay dividends pursuant to its previous policy should not be
impaired. However, it is unlikely that the Company will be in a position to
make further redemption offers for the foreseeable future (except as necessary
to provide liquidity to the ESOP) based on the amount of debt to be incurred in
connection with the proposed transactions.
FEDERAL INCOME TAX CONSEQUENCES
Capital Gain Treatment
The redemption by a corporation of shares of its stock from a shareholder
will be treated as a dividend and taxed as ordinary income, without any offset
for the shareholder's cost basis in such stock, unless the redemption meets one
of the tests set forth in Section 302 of the Internal Revenue Code of 1986, as
amended (the "Code"). If a redemption meets one of such tests, the proceeds
realized on the transaction in excess of the shareholder's cost basis will be a
capital gain taxed at a rate which depends on the shareholder's holding period
for the shares. Capital gain treatment is also dependent on the shares being a
capital asset in the shareholder's hands, as opposed, for example, to inventory
in the hands of a dealer in securities. This discussion assumes that the shares
held by each of the Offerees are capital assets in such Offeree's hands.
A shareholder will be entitled to capital gain treatment if he or she
meets any of three tests under Section 302 of the Code which are relevant to
the Offer and provide for capital gain treatment. These tests as applied to the
Offer are as follows: (1) the redemption pursuant to the Offer is
"substantially disproportionate" as to the Offeree; (2) the redemption pursuant
to the Offer is in complete redemption of all of the shares of Common Stock
owned by the Offeree; or (3) the redemption pursuant to the Offer is not
essentially equivalent to a dividend payment to the Offeree. In making the
foregoing determinations and subject to certain exceptions discussed below,
each Offeree is deemed to own not only the shares actually owned by him or her
but also the shares owned directly, or indirectly, by or for certain related
parties, including his or her spouse, children, grandchildren and parents, as
well as by certain entities in which he or she has an interest, including
certain corporations, partnerships, estates and trusts. Likewise, subject to
certain exceptions, the shares owned by an Offeree are deemed also to be owned
by such related parties. This concept of constructive ownership is commonly
referred to as "attribution of ownership" and is prescribed in Section 318 of
the Code, subject to certain modifications set forth in Section 302 of the
Code.
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<PAGE> 6
In order for a redemption to be substantially disproportionate as to an
Offeree, the Offeree must compare his or her percentage interest in the
outstanding shares of the Company owned, or deemed owned by the Offeree through
attribution of ownership, both before and after the Offer is consummated. If
the percentage interest after the Offer is consummated is less than 80% of the
percentage interest before the Offer is consummated, the Offeree will be
entitled to capital gain treatment. As an example, assume that an Offeree
("Shareholder A") owns 10,000 shares of the Company's Common Stock and his
child ("Shareholder B") owns 5,000 shares. Assume also that no other Offerees
have a relationship which results in attribution of ownership to either
Shareholder A or Shareholder B. Both Shareholder A and Shareholder B would be
deemed to own the shares which they own directly and the shares owned by the
other of them, or a total of 15,000 shares each which is [___]% of the
[________] shares issued and outstanding on the Record Date. The Redemption
Right Certificate distributed to Shareholder A would cover the sale to the
Company by Shareholder A of [_____] shares and the Redemption Right Certificate
distributed to Shareholder B would cover the sale to the Company of [___]
shares. If both Shareholder A and Shareholder B were to sell to the Company all
of the shares covered by their Redemption Right Certificates, both Shareholder
A and Shareholder B would own and be deemed to own an aggregate of [____]
shares after the redemption of shares pursuant to the Offer which would
represent not more than [___]% of the Company's shares of Common Stock then
outstanding. The [__]% direct and attributed ownership after consummation of
the Offer would be less than 80% of the [___]% direct and attributed ownership
before the Offer, resulting in both Shareholder A and Shareholder B qualifying
for capital gain treatment.
As illustrated by the foregoing example, if all of the Offerees which are
part of a group of Offerees having a direct or indirect relationship resulting
in attribution of ownership under Section 302 of the Code were to sell to the
Company all of the shares covered by the Redemption Right Certificates
distributed to them, every Offeree in such group would be entitled to capital
gain treatment, with the rate of taxation based on his or her holding period.
This was the basis on which the Company fixed the number of shares which are
covered by the Redemption Right Certificates distributed to the Offerees.
However, the Company recognizes that some Offerees may not wish to sell any
shares or may desire to sell fewer or more shares than covered by their
Redemption Right Certificate while preserving, to the extent possible, the
ability of related Offerees to qualify for capital gain treatment. For this
reason, the Redemption Right Certificates may be assigned, subject to certain
conditions, which may provide the necessary flexibility for each member of a
related group of Offerees to sell the desired number of shares and for each of
them to qualify for capital gain treatment. However, in certain cases it may
not be possible to achieve the desired result. Returning to the above example,
if Shareholder A wants to sell as many shares as possible and Shareholder B
does not wish to sell any shares, if Shareholder B assigned his or her
Redemption Right Certificate to Shareholder A and Shareholder A sold all of the
shares covered by the Redemption Right Certificate distributed to Shareholder A
and the one assigned to Shareholder A by Shareholder B, Shareholder A will
qualify for capital gain treatment. However, if Shareholder A did not wish to
sell any shares and Shareholder B wished to sell all of his or her shares, the
assignment of Shareholder A's Redemption Right Certificate to Shareholder B
would permit Shareholder B to sell all of his or her shares but the transaction
would not be substantially disproportionate as to Shareholder B because the
10,000 shares owned and retained by Shareholder A and attributed to Shareholder
B would not permit Shareholder B to pass the mathematical percentage ownership
test. However, it may be possible that the redemption of all of Shareholder B's
directly owned shares would qualify under another test depending on a variety
of other factors.
If pursuant to the Offer, the Company redeems from an Offeree all of the
shares owned directly by such Offeree, such redemption might qualify for
capital gain treatment as a "complete redemption" even though shares owned
directly or indirectly by other Offerees would otherwise be attributable to
such
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<PAGE> 7
Offeree and prevent the redemption from meeting the mathematical test of
being "substantially disproportionate." Section 302 of the Code permits the
suspension of the family attribution rules (but not entity attribution rules)
of Section 318 of the Code if the redemption is in complete termination of a
shareholder's interest in the Company other than as a creditor, including the
termination of any interest as an employee, officer or director. Further, in
order to suspend family attribution, the shareholder must agree not to acquire
any interest in the Company for the ensuing ten years other than by inheritance
and agree to notify the Internal Revenue Service of any such acquisition.
However, family attribution is not suspended for a particular shareholder if
any transfer of shares was made or received by such shareholder during the
prior ten years to or from any other shareholder who at the time of the
redemption bears a relationship resulting in attribution with the shareholder
(unless such transfer did not have as one of its principal motives the
avoidance of Federal income tax). As stated above, family attribution rules may
be suspended in the event of a complete termination of a shareholder's
interest, but attribution from entities is not suspended, requiring the
redemption of all of the shares owned by the entity in order to eliminate
attribution from the entity.
In addition to the "substantially disproportionate" and "complete
redemption" tests, an Offeree may qualify for capital gain treatment if the
redemption from the Offeree pursuant to the Offer is "not essentially
equivalent to a dividend." This test does not have any mathematical rules for
its application but has been interpreted in various court decisions and
Internal Revenue Service rulings, with the outcome depending on the particular
facts and circumstances. Since it lacks mathematical certainty, the "not
essentially equivalent to a dividend" test is generally not used for planning
purposes but may permit capital gain treatment for an Offeree who cannot meet
either the "substantially disproportionate" test or the "complete redemption"
test.
As should be apparent from the foregoing discussion, in any situation
where all Offerees who bear a relationship resulting in direct or indirect
attribution of ownership under Section 318 of the Code do not exercise in full
the rights represented by the Redemption Right Certificates distributed to
them, the determination of whether any of such Offerees who accept the Offer
will qualify for capital gain treatment may be relatively complex. In order to
assist Offerees in determining the federal income tax consequences to them of
accepting the Offer, the Company will make available, at its expense, to any
Offeree who desires such assistance, the resources of the Company's independent
public accounting firm, BDO Seidman. Any Offeree desiring such assistance
should contact the Company's Senior Vice President - Administration, Daniel T.
Caldon, at (616) 791-7735 as soon as possible.
BECAUSE OF THE NUMBER OF JURISDICTIONS IN WHICH OFFEREES RESIDE, THE
COMPANY HAS NOT ADDRESSED, AND IS NOT IN A POSITION TO OFFER RESOURCES TO
ADDRESS, THE ISSUE OF STATE OR FOREIGN TAXES.
Installment Treatment
An Offeree who qualifies for capital gain treatment and receives a Note in
partial payment will be entitled to report the gain realized by him or her on
the installment basis under Section 453 of the Code. As an example, if an
Offeree had a cost basis of $4,000 and a gross selling price of $40,000 for the
shares redeemed, 10% of the initial cash payment and of each subsequent
installment of principal would represent recovery of basis and the balance of
90% of each such payment would represent capital gain taxable in the year in
which received. Interest received on the Note will be taxable as ordinary
income as received. In general, if an Offeree who received a Note in partial
payment and is entitled to installment treatment transfers such Note, the
Offeree's gain will be accelerated. An Offeree who qualifies for capital
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<PAGE> 8
gain treatment may elect not to be taxed on the installment basis resulting in
recognition of his or her entire gain in 1998.
An Offeree who does not qualify for capital gain treatment will be
required to recognize as ordinary income in 1998 an amount equal to the sum of
the cash and the value of the Note received by such Offeree from the Company
without reduction for the cost basis of the shares of Common Stock redeemed.
THE SUBORDINATED NOTES
General
The payment of the $[___] per share Purchase Price will be in the form of
cash to the extent of $[___] per share and the balance of $[___] per share in
face amount of the Company's Subordinated Notes dated as of the Expiration Date
(the "Notes"). However, Offerees who own [250] shares of Common Stock or less
or who are residents of Canada will be paid only in cash. Also, the Company
reserves the right to pay cash in lieu of each Note that is equal to or less
than a minimum principal amount, not to exceed $10,000, as determined by the
Company upon completion of the Offer.
The Notes will bear interest at a per annum rate determined as described
below but not less than [___]%. Interest will be payable quarterly on March 31,
June 30, September 30 and December 31 of each year (each an "Interest Payment
Date"), commencing June 30, 1998, until the principal of the Notes has been
paid in full. The principal portion of the Notes will be repaid in seven equal
installments, payable annually on June 30 of each year, commencing June 30,
2002, subject to the Company's right to prepay the principal as described
below.
The interest rate on the Notes will be equal to the Applicable Federal
Rate but not less than [___]% per annum. The "Applicable Federal Rate" means
the rate as of the Expiration Date determined by the Internal Revenue Service
pursuant to Section 7520 of the Internal Revenue Code of 1986, as amended, for
mid-term obligations with interest payable quarterly. The use of a rate of
interest at least equal to the Applicable Federal Rate in connection with an
obligation related to the purchase and sale of property assures that the
Internal Revenue Service will not attempt to reallocate and recharacterize as
interest any portion of the principal payments. If the interest rate on the
Notes were being determined as of the date of this Memorandum, it would be
[__]%, and the interest rate on the Notes will not be less than such rate.
The Company does not make any representations that the interest rate on
the Notes, taking into consideration all of the terms and conditions of the
Notes, represents a market rate of interest or that the fair market value of a
Note is equal to its face amount.
The Notes are to be issued under an Indenture, to be dated as of
March 15, 1998 (the "Indenture"), between the Company and First of America
Bank, N.A., Kalamazoo, Michigan, as Trustee (the "Trustee"), a copy of which
Indenture is on file at the Company's main offices and a copy of which will be
made available upon request and without cost to any Offeree. The following
summaries of certain provisions of the Notes and the Indenture do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to all of the provisions of, the Notes and Indenture, including the
definitions therein of certain terms. Wherever particular Sections or defined
terms are referred to, such Sections or defined terms are located in the
Indenture and are incorporated herein by reference.
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<PAGE> 9
The Notes may be presented for registration of transfer or exchange at the
offices of the Registrar. Payments of principal and interest on the Notes will
be made by check mailed to the registered address of the Person entitled
thereto as it appears in the register of the Registrar as of the applicable
record date for determining the persons entitled to receive, as applicable,
quarterly payments of interest and annual payments of principal under the
Notes.
The Notes will be issued only in registered form, without coupons, in
denominations which are an even multiple of $[______]. (Section 2.01.) No
service charge will be made for any registration of transfer or exchange of
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith. (Section 2.06.)
Prepayment
The Notes may be prepaid at the Company's option, in whole or in part,
upon not less than 30 nor more than 60 days' notice mailed to each then current
Holder of Notes at his or her address appearing in the register of the
Registrar. Any prepayment of Notes will be done on a pro rata basis. The notice
will state the Interest Payment Date on which the prepayment shall be made; the
amount of the prepayment; if the Notes are being prepaid in part, the portion
of the principal amount of the Notes being prepaid and to be outstanding
thereafter and that, after the Interest Payment Date on which the prepayment is
being made and upon surrender of the Notes, the Notes shall be returned to the
Holders after the Company has placed thereon a notation of the amount prepaid
and the date of such prepayment; the name and address of the Paying Agent; that
the Notes must be surrendered to the Paying Agent to collect the amount being
prepaid; and that, unless the Company defaults in making such prepayment,
interest on the amount being prepaid ceases to accrue on and after the Interest
Payment Date on which the prepayment is being made. If the Company elects to
prepay the Notes in whole or in part, it must furnish to the Trustee, at least
45 days but not more than 60 days before the Interest Payment Date on which
such prepayment will be made, an Officer's Certificate setting forth (i) the
Interest Payment Date on which such prepayment is to be made and (ii) the
amount of principal to be prepaid. (Article 3.)
Subordination
The payment of the principal of and interest on the Notes will, to the
extent set forth in the Indenture, be subordinated in right of payment to the
prior payment in full of all Senior Debt. "Senior Debt" means all of the
Company's indebtedness for borrowed money from time to time outstanding (other
than indebtedness under the Notes) unless the instrument under which such
indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. Senior Debt does not include tax
liabilities owed or owing by the Company or trade payables of the Company. Upon
any liquidation, dissolution, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, (i) the holders of all Obligations due in respect
of Senior Debt will first be entitled to receive payment in full of all amounts
due or to become due thereon before the Holders of the Notes will be entitled
to receive any payment in respect of the principal of or interest on the Notes
and (ii) until all Obligations with respect to Senior Debt are paid in full in
cash, any distribution to which Holders of Notes would be entitled but for
clause (i), above, shall be made to holders of Senior Debt, as their interests
may appear. Until all principal and other Obligations with respect to the
Senior Debt have been paid in full in cash, the Company shall not make any
payments of principal, interest or other Obligation in respect of the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than Permitted Junior Securities) if there shall have occurred and be
continuing a default in any payment with respect
9
<PAGE> 10
to Senior Debt, or an event of default with respect to any Senior Debt
permitting the holders thereof to accelerate the maturity thereof or, if any
judicial proceeding shall be pending with respect to any such default.
(Article 9.)
As of [________], 1998, the Company had approximately $[_________] of
Senior Debt outstanding. The Indenture does not prohibit or limit the
incurrence of Senior Debt by the Company.
Events of Default
The following will be Events of Default under the Indenture: (a) failure
to pay principal on the Notes when due, continuing for five days, whether or
not such payment is prohibited by the subordination provisions of the
Indenture; (b) failure to pay any interest on any Notes when due, continuing
for 30 days, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (c) failure by the Company for 30 days after
notice from the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes to comply with the successor provisions of
the Indenture; (d) failure by the Company for 60 days after proper notice from
the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes to comply with any of its other agreements in the
Indenture or the Notes; (e) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company (or the payment of which is
guaranteed by the Company) whether such Indebtedness or guarantee now exists,
or is created after the date hereof, which default results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness the maturity of which has been so accelerated,
aggregates $5.0 million or more; (f) failure by the Company to pay final
judgments aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; and (g) certain events in
bankruptcy, insolvency or reorganization of the Company. (Section 7.01.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default has occurred and is continuing, the Trustee
is under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 7.02.)
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the outstanding Notes will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee. (Section 6.05.)
If an Event of Default has occurred and is continuing, either the Trustee
or the Holders of at least 25% in aggregate principal amount of the outstanding
Notes may accelerate the maturity of all Notes; provided, however, that after
such acceleration, but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of outstanding Notes may,
under certain circumstances, rescind and annul such acceleration if all Events
of Default, other than the non-payment of accelerated principal, have been
cured or waived as provided in the Indenture. (Section 6.02 and 6.04.)
No Holder of any Notes will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default and unless also the Holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request to pursue the
remedy, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in aggregate principal amount of the outstanding Notes a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. (Section 6.06.) However, such limitations do
not apply to a suit instituted by a Holder of a Note for the enforcement of
payment of the
10
<PAGE> 11
principal of, or interest on, such Note on or after the respective due dates
expressed in such Notes. (Section 6.07.)
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance. (Section 4.03.)
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the outstanding Notes; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Notes affected thereby, (a) reduce the principal amount of, or
interest on, any Notes, (b) reduce the principal of or change the fixed
maturity of any installment of principal on any Notes, (c) reduce the rate of
or change the time for payment on any Note, (d) waive a Default or Event of
Default in the payment of principal of or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration), (e) make any Note payable in money other
than that stated in the Notes, (f) make any change in the provisions of the
Indenture relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of or interest on the Notes, (g) waive
any prepayment with respect to which notice has been given to the Holders under
Section 3.03 of the Indenture, or (h) make any change in Section 6.04 or 6.07
of the Indenture or in the amendment and waiver provisions of Section 8.02 of
the Indenture. (Section 8.02.)
The Holders of a majority in aggregate principal amount of the outstanding
Notes may waive compliance by the Company with certain restrictive provisions
of the Indenture. (Section 8.02.) The Holders of a majority in aggregate
principal amount of the outstanding Notes may waive any past default under the
Indenture, except a default in the payment of principal or interest or the
performance of any covenant which may be waived only with the consent of the
Holder of each outstanding Note affected. (Section 6.04.)
Consolidation, Merger and Sale of Assets
The Company may, without the consent of any Holders of Notes, consolidate
or merge with or into, or transfer or lease all or substantially all of its
assets to, any Person, and any other Person may consolidate or merge with or
into, or transfer or lease all or substantially all of its assets to, the
Company, provided that (a) the Company is the surviving entity or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or which acquires or leases all or substantially all of the
assets of the Company is organized and existing under the laws of any United
States jurisdiction and assumes the Company's obligations on the Notes and
under the Indenture, (b) after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing, and (c)
certain other conditions are met. (Article 5.)
Restrictions on Transfer
The Notes are not transferable except pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or in a
transaction exempt from the registration requirements of the Securities Act,
and in accordance with all applicable securities laws of the states of the
United States and any foreign jurisdiction. See "The Subordinated Notes;
General" for requirements to complete a transfer,
11
<PAGE> 12
including registration of transferred Notes with the Company and payment of
applicable expenses. (Section 2.06.)
FUNDING OF OFFER AND SIMULTANEOUS REDEMPTION FROM ESOP
Management proposes to fund the cash payment to the ESOP and to the
Offerees, aggregating approximately $19,500,000, through a restructuring of its
current financing agreements. Specifically the Company will set up separate
financing lines for its Consumer Products Group and Graphics Division, or the
Company, and for the BISSELL Healthcare Division ("BHC").
The financing for the Company will consist of a private placement of
approximately $40 million of senior unsecured notes. These notes are expected
to have a ten year maturity with a seven year average life. The coupon is
expected to be approximately 110 basis points over the ten year Treasury bond
rate, indicating an investment grade security. The notes will rank pari passu
with the Company's other senior indebtedness. The notes will contain provisions
for a prepayment "make-whole," change in control put, and minimum financial
covenants including the following: (1) maintenance of net worth at $27 million
plus 40% of net income (positive only), (2) total debt to consolidated
operating cash flow not to exceed 3.5 to 1, (3) fixed charges not less than
1.75 to 1, and (4) priority debt such as liens not to exceed 20% of net worth.
In addition, the Company will require a senior unsecured revolving credit line
of $45 million. Based on cash flow projections, over the next approximately
five years, the Company will be able to reduce its outstanding debt to lower,
more normal levels of leverage.
The financing of BHC will consist of a senior unsecured revolving credit
line of $25 million.
Set forth below is a description of the capitalization of the Company on a
consolidated basis as of December 31, 1997 and as adjusted for (i) the
redemption of shares pursuant to the Offer and the simultaneous redemption of
shares of Common Stock from the ESOP, and (ii) the financing of such
redemptions as described above. The "as adjusted" numbers are based on the
assumptions that the Offer is fully subscribed and that the redemptions
pursuant to the Offer and from the ESOP and related financing had occurred on
December 31, 1997.
<TABLE>
<CAPTION>
December 31, 1997
-----------------
Actual As Adjusted
------ -----------
<S> <C> <C>
Short-term debt:
Notes payable to banks and current portion of long-term debt . . . . . . . . .
Long-term debt, net of current portion . . . . . . . . . . . . . . . . . . . .
Shareholders' equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid in capital . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned ESOP shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative foreign currency translation adjustment . . . . . . . . . . . . .
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . .
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
If the Offer is not fully subscribed, up to an additional [_____] shares
of Common Stock may be purchased from the ESOP for cash at the offering price
specified in this Memorandum.
12
<PAGE> 13
APPRAISED VALUE OF COMMON STOCK
The Company engaged Duff & Phelps, LLC ("D & P") to determine the fair
market value for ESOP purposes of the Company's Common Stock as of the most
recent practicable date following completion of the Company's audited financial
statements for the year ended December 31, 1997 and the Company is using the
results of such valuation in connection with the Offer. The valuation was made
by D & P as of March [__], 1998 and D & P's conclusion was that the value of a
share of the Company's Common Stock as of such date for ESOP purposes was
$[___] per share. D & P is an independent firm which provides valuation,
financial advisory and consulting services to a wide range of clients in
connection with transactions varying in size up to approximately $[__] billion.
D & P also has substantial experience in providing valuation services in
connection with ESOP-related transactions and providing annual valuations of
stock held in ESOP's for many companies. The Company has relied on the
qualifications of D & P as an expert in providing valuations for ESOP purposes.
The Company has used D & P to value the Common Stock for ESOP purposes for more
than [___] years.
For purposes of making its determination of value, D & P reviewed, among
other things, the Company's audited financial statements for the years ended
December 31, 19[__] through 1997; strategic plans and financial projections
prepared by management, the ESOP plan documents; operating statements for the
Company's three separate operating entities; and other internal information. It
also interviewed Company management and updated its knowledge of the Company,
its business environment and future prospects based on meetings with
management. D & P relied on the accuracy and completeness of this information
provided to it which it did not independently verify. A summary of the
financial projections prepared by management and provided to D & P and the
assumptions upon which such projections are based are set forth in the
Company's annual report to its shareholders. Offerees should bear in mind that
such projections and related assumptions are of future financial and operating
performance and as such consist of forward-looking statements. Such projections
and assumptions are not to be viewed as facts and should not be relied upon as
an accurate representation of future results. Furthermore, because the
projections are based on estimates and assumptions about circumstances and
events that have not yet taken place, are not within the Company's control and
are subject to material variation, there can be no assurance that the
anticipated events and assumptions upon which the projections are based will in
fact transpire or that the projected results will be attained. Among the many
factors which are beyond the control of the Company and which may affect the
Company's ability to achieve the projected results are interest rates, the
relationship of the United States dollar to foreign currencies and new product
introductions by competitors.
The valuation by D & P is based on its assessment of "fair market value"
which it defines to be the price at which an asset would change hands between a
willing buyer and a willing seller where the former is not under any compulsion
to buy and the latter is not under any compulsion to sell, and both parties are
able, as well as willing, to trade and are well informed about the asset and
the market for such asset. Although the valuation was made solely for ESOP
purposes and although participants in the ESOP have the right to require the
repurchase of their shares at fair market value, D & P did not apply any
discount for lack of marketability in arriving at the fair market value of
shares of Common Stock. See "Important Factors to be Considered by Offerees." D
& P based its determination of fair market value for ESOP purposes on a wide
variety of qualitative and quantitative factors which included: (i) the nature
and history of the Company's business; (ii) the economic outlook, in general,
and the condition of the specific industries in which the Company operates;
(iii) the book value of the Company's Common Stock and the Company's financial
condition; (iv) the earnings capacity of the Company; (v) the Company's
dividend paying capacity; (vi) any goodwill or intangible value of the Company;
(vi) the market price of securities of corporations engaged in the same or
similar lines of business as the Company which are
13
<PAGE> 14
actively traded in a free and open market; (vii) the rights of ESOP participants
to require the repurchase of shares; and (viii) the percentage interest being
valued, which is less than control.
In arriving at its determination of fair market value for ESOP purposes, D
& P used two different valuation methodologies which D & P has indicated are
generally used and accepted within the financial community. They were as
follows: (i) discounted cash flow ("DCF") analysis based on projections of
future operating results and capital requirements; and (ii) comparative
analysis involving a comparison of the Company with publicly traded companies
engaged in lines of business similar to those of the Company and with respect
to relative performance statistics and valuation multiples.
In applying the DCF analysis, D & P estimated free cash flow, being the
amount estimated to be available by the Company to reinvest in new businesses
or to distribute to shareholders in the form of dividends, stock buybacks or
debt service. The estimated free cash flows for future years were then
discounted to arrive at present value. The discount rate used by D & P was the
weighted average of the rates which it determined debt and equity investors
would reasonably target for an investment in the business. The rate of return
on debt considered the after-tax long-term borrowing rate of companies with
credit worthiness similar to the Company, or about [__]% (about [__]% pretax).
The rate of return on equity capital was estimated using the Capital Asset
Pricing Model ("CAPM") which approximates the 20-year Treasury bond yield plus
an equity risk premium based on the nondiversifiable risk inherent in a stock
investment. Since the Company is small relative to New York Stock Exchange
traded companies, a small stock premium was added to the cost of equity
determined by CAPM. The resulting cost of equity was determined to be [__]%
and, based on a capital structure of [__]% debt and [__]% capital, D & P
arrived at a weighted average cost of capital of [__]%. Such weighted cost of
capital, was then used by D & P to value the enterprise and arrive at the fair
market value of the equity interests in the Company for ESOP purposes.
In applying the comparative company approach, D & P examined operating and
financial data, market prices and resulting valuation multiples for [__] public
companies engaged in businesses that D & P considered to be comparable to the
Company's three distinct lines of business. Combining the results of the DCF
analysis and the comparative analysis, D & P concluded that $[___] per share
represents fair market value of the Company's Common Stock for ESOP purposes.
A complete copy of the valuation report of D & P is available for
inspection by any Offeree and the duly designated representatives of any
Offeree at the Company's office at 2345 Walker, N.W., Grand Rapids, Michigan
49544 during regular business hours. To make arrangements for such an
inspection, please contact Mr. Daniel T. Caldon, Senior Vice President -
Administration at (616) 791-7735.
ANNUAL REPORT
This Memorandum is accompanied by the Company's annual report to its
shareholders for 1997 and should be read in conjunction with such annual report
which contains, among other things, the audited financial statements of the
Company for its fiscal years ended December 31, 1996 and 1997, management's
discussion and analysis of significant changes in line items in the
Consolidated Statements of Income between fiscal 1995 and fiscal 1996 and
between fiscal 1996 and fiscal 1997, a description of recent developments at
the Company, a summary of key operating and balance sheet figures for the past
five fiscal years and a five-year summary of the dividend history of the
Company and of the appraised value of the Common Stock for ESOP purposes.
14
<PAGE> 1
Exhibit T3-F
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1).............................................7.10
(a)(2).............................................7.10
(a)(3).............................................N.A.
(a)(4).............................................N.A.
(a)(5).............................................7.10
(b)................................................7.10
(c)................................................N.A.
311 (a)............................................7.11
(b)................................................7.11
(c)................................................N.A.
312 (a)............................................2.05
(b)...............................................11.03
(c)...............................................11.03
313 (a)................................................7.06
(b)(1).............................................N.A.
(b)(2).............................................7.07
(c)......................................... 7.06;11.02
(d)................................................7.06
314 (a)..........................................4.03;11.02
(c)(1)............................................11.04
(c)(2)............................................11.04
(c)(3).............................................N.A.
(d)................................................N.A.
(e)...............................................11.05
(f)............................................... N.A.
315 (a)................................................7.01
(b)..........................................7.05,11.02
(c)................................................7.01
(d)................................................7.01
(e)................................................6.11
316 (a)(last sentence).................................2.09
(a)(1)(A)..........................................6.05
(a)(1)(B)..........................................6.04
(a)(2).............................................N.A.
(b)................................................6.07
(c)................................................N.A.
317 (a)(1).............................................6.08
(a)(2).............................................6.09
(b)................................................2.04
318 (a)...............................................11.01
(b)................................................N.A.
(c)...............................................11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
